Guaranteed loans help firms

More than 5,700 businesses have applied for loans through the Hellenic Development Bank’s Credit Guarantee Fund.

Retail banks provide the loans though the HDB’s funds; these loans are guaranteed by the state.

Total applications come to €3.4 billion; this almost covers the €3.5 billion made available through state subsidy and capital provided by banks.

According to data provided to Kathimerini, the 5,700 applicants include 400 large enterprises and 5,300 small and medium-sized businesses. The large companies will get loans worth €1.9 billion, while the other €1.5 billion will be divided between the 5,300 SMEs. Thus, on average, each large enterprise will borrow €5 million while each SME will borrow €300,000.

The state is providing €500 million for loans of up to €1.5 billion to small and medium enterprises, guaranteeing up to 40% of the loan. The rest of the amount is provided by the retail banks.

The state is also providing €500 million to guarantee up to 30% of a loan to a larger enterprise; banks are providing another €1.5 billion to raise the total amount available to large enterprises to €2 billion.

At the Development and Investment Ministry, they are already planning the second phase of the program, in which €1 billion of state money will be leveraged for a total of €3.3 billion in loans. This second phase of the credit guarantee is expected to start in September.

This time the officials are aiming to channel more money to SMEs, the ones most in need of liquidity. So, from splitting the state money 50-50 during the first phase, it is expected that 80% of the state funding will be made available to small and medium-sized businesses. Thus, SMEs are expected to get €2.5 billion in loans in the second phase of the program and larger ones €800 million.

The loans from the first phase must be taken out by the end of the year; so far, recipients have taken €2.2 billion. To this amount, one must add the €1.5 billion disbursed through the Entrepreneurship Fund.