The Romanian Government has recently adopted a series of measures to support SMEs and microenterprises in the context of the Covid-19 crisis. It is estimated that the measures below will be granted to maximum number of 40.000 beneficiaries, against a total budget of EUR 161 million. Non-eligible companies are those that have requested other types of state aid for the same eligible costs or companies against which measures for state aid recovery have been initiated or executed.
Also, an important restriction has been instituted, in an attempt to limit the social effects of the crisis which poses risks for a significant number of employees to be laid off as a consequence of the current economic challenges. As such, in order to benefit from the measures below, SMEs and microenterprises must undertake to not lay off existing employees until 31 December 2020. However, companies may organize the working schedule of the employees depending on the evolution of the company, meaning that arguably the current measures allow companies to reduce the working hours, if a decrease in activity occurs.
Among the most important measures adopted by the state in a bid to support Romanian businesses are as follows:
>> Increase of the threshold for state guarantees to 80%, respectively 90% of the credit value – this applies to financing granted to SMEs and microenterprises for investments or working capital.
As such, credit facilities for investments or working capital will be guaranteed by the Ministry of Public Finance up to a maximum of 80% of their value, excluding interest, fees and bank charges related to the secured credit. The maximum value of the financing is RON 5,000,000 in case of working capital credits and RON 10,000,000 for investment credits, certain limitations being applicable, depending on the expenses with workforce, turnover or liquidity necessities of the company. Moreover, the aggregate maximum value of the financings guaranteed by the State that can be granted to a beneficiary as per these facilities is RON 10,000,000.
In case of micro and small enterprises, guarantees will be granted for credits/lines of credit for working capital financings up to a maximum 90%, excluding interest, commissions and bank charges. The maximum value of the financings will be of RON 500,000 for microenterprises and RON 1,000,000 for small businesses, certain limitations being applicable as well, depending on the expenses with workforce, turnover or liquidity necessities of the company.
The maximum period for credits/lines of credit for working capital is of 3 years, with the possibility of extension with another 3 years. For investment credits, the maximum period for financing is 6 years.
>> Subsidizing 100% of interests and bank fees for working capital or investment credits secured with state guarantee – through this measure, the Ministry of Finance will cover through grants the interests and fees for SMEs which will access credit lines and loans for state guaranteed investments. The grants cover interests and fees until 31 December 2020 and beneficiaries may apply for grant in a maximum limit of EUR 800,000 each.
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