Liquidity Measures
Governmental Intermediated SME Loan Guarantee Program
Government Measure
An increase of BGN 500 m (approx. €255m) of the capital of the Bulgarian Development Bank has been used for portfolio guarantees on investment loans and working capital unsecured loans to SMEs affected by the coronavirus outbreak in Bulgaria.
The underlying loan amount per company is limited to the amount needed to cover its liquidity needs for the foreseeable future but not more than BGN 300,000 (approx. €153k).
Grace period for principal and interest up to 36 months.
The guarantees will only be granted if application is made by 23 December 2020.
The guarantees are limited to a maximum five-year duration.
The guarantee coverage for each loan is maximum 80%.
Eligibility
Bulgarian based SMEs1 operating in all sectors, including those most affected by the crisis, such as tourism, transport, wholesale and retail trade. meeting at least one of the following criteria (as applicable):
- Decrease in the turnover for the first quarter of 2020 as compared to the first quarter of 2019 (based on the borrower’s interim unaudited financial statements)2;
- Existing receivables from clients that have not been collected and/or amounts due to suppliers after 1 March 2020 (based on the borrower’s financial statements);
- Cancelled after 1 January 2020 supplies from abroad that are necessary for the operations of the enterprise and/or cancelled contracts for export (based on certificates and documents provided by the borrower);
- Illness or quarantine of employees, overall reduction of the employees, closed production facilities, premises, offices (based on certificates and documents provided by the borrower).
1Small-sized companies are those having (i) an average number of staff fewer than 50 people, and (ii) an annual turnover not exceeding BGN 19.5m (approx. €9.97m) and/or an asset value not exceeding BGN 19.5m Medium-sized companies are those having (i) an average number of staff fewer than 250 people, and (ii) an annual turnover not exceeding BGN 97.5m (approx. €49.851m) and/or an asset value not exceeding BGN 84m (approx. €42.949m).
2No guidance has been issued, but our initial view is that the turnover test will be assessed by reference to interim unaudited financial statements.
Supervising Authority
Bulgarian Development Bank
Further information on the terms of the program is available here (in Bulgarian only).
Financing is available through accredited third party lenders – commercial banks. Applications need to be made directly to the accredited lender. Several commercial banks have applied for approval of accredited third party lenders under the program.
Availability
Contracts with accredited third party lenders expected to be finalized by the end of May 2020 and the program to be available from that date until 23 December 2020.
Intermediated SME Loan Guarantee Program with EU funds
Government Measure
The Fund Manager of Financial Instruments in Bulgaria EAD, the entity managing financial instruments co-financed by the European Structural and Investment Funds in Bulgaria, will provide guarantees totalling BGN 170m (approx. €87m) to third party lenders that will back up a fresh loan portfolio of up to BGN 850m (approx. €435m).
Companies would be able to benefit from long-term loans of up to BGN 3.6m (approx. €1.840m) and maturity of up to 10 years mainly for working capital and investment needs arising from the coronavirus outbreak in Bulgaria.
Zero interest and long grace periods are being considered but the particular terms and requirements are yet to be announced.
Financing may be made available through accredited third party lenders.
Applications will most likely need to be made directly to the accredited lender.
Note: Aside from the above, existing fund programmes by the Fund Manager of Financial Instruments in Bulgaria EAD that have been in place prior to the COVID-19 pandemic aimed at SMEs, start-ups and small business would be further enhanced with additional funds and/or simplified approval procedures.
Eligibility
Bulgarian based SMEs operating in various sectors, including those most affected by the crisis, such as tourism, transport, wholesale and retail trade. Specific terms and eligibility requirements are still pending final approval.
Supervising Authority
Fund Manager of Financial Instruments in Bulgaria EAD.
Availability
Pending final approval of the terms and requirements. List of accredited third party lenders expected to be announced by the end of May 2020 and the program to be available from that date.
Sofia Municipality Intermediated Loan Guarantee Program
Government Measure
Sofia municipality will provide BGN 1,000,000 (approx. €511.3k) to the Municipal Guarantee Fund to be used for guarantees of loans provided by third-party lenders.
The guarantees will cover between 50% and 80% of the principal under a loan but not more than BGN 15,000 (approx. €7.67k) per company.
Financing may be made available through accredited third party lenders.
Applications will most likely need to be made directly to the accredited lender.
Eligibility
Bulgarian based SMEs operating in various sectors, including those most affected by the crisis, such as tourism, transport, wholesale and retail trade meeting the following criteria (as applicable):
- the activity of the enterprise to be carried out on the territory of Sofia Municipality;
- the activity of the enterprise should fall into the economic branches affected by the emergency measures introduced at national and / or regional level.
Specific terms are still pending final approval
Supervising Authority
Municipal Guarantee Fund
Availability
Measures have been approved on 23 March 2020
The availability dates and duration of the programme has not been clarified.
Loans to micro enterprises by Micro Financing Institution JOBS EAD (a subsidiary of Bulgarian Development Bank)
Government Measure
The product is aimed to preserve the operations and the personnel of micro enterprises.
Loans will be granted in an amount of up to BGN 48,800 (approx. €24.95k) for working capital and covering of ongoing expenses.
Eligibility
Bulgarian micro enterprises (those having (i) an average number of staff fewer than 10 people, and (ii) an annual turnover not exceeding BGN 3.9m (approx. €1.994m) and/or an asset value not exceeding BGN 3.9m) including legal entities; individuals working as agricultural producers or commercial operators; and agricultural cooperatives, in each case:
- with an existing or starting business, facing liquidity difficulties due to the COVD-19 pandemic;
- with a clear credit history (including for affiliates);
- without overdue public liabilities (e.g. tax, social security contributions, etc.); and
- without pending enforcement actions against them and their assets.
Security may be required in the form of:
- promissory notes;
- personal guarantees; or
- guarantee under EaSi (EU Program for Employment and Social Innovation).
Supervising Authority
Micro Financing Institution JOBS EAD
Applications for the scheme can made by companies here (in Bulgarian only).
Availability
From 13 April 2020 and currently in force.
Deferred payment of annual corporate income tax for 2019
Government Measure
Deadline for declaring and paying annual corporate income tax for 2019 is deferred from 31 March 2020 to 30 June 2020.
Eligibility
All businesses subject to corporate income tax in Bulgaria.
Supervising Authority
Bulgarian National Revenue Agency
Automatic effect with no applications required.
Availability
Deferral period runs from 31 March 2020 until 30 June 2020.