Hungary

Government Measure

Eligible entities may apply for investment loans, financial leasing and working capital loans.

Finance terms of up to twenty years for investment loans and up to three years for working capital loans

The maximum amount of a loan facility available for an SME will be HUF 20b (approx.€57m).

National Bank of Hungary will provide refinancing loans to credit institutions at a zero-interest rate, and interest to be paid by SMEs will be maximum of 2.5  percent.

Eligibility

Main conditions:

Must be a Hungarian based SMEs:

• SME’s: micro-, small- and medium-sized enterprises (“SMEs”).
  • Medium-sized enterprises: fewer than 250 employees and annual turnover not exceeding €50m and/or an annual balance sheet total not exceeding €43m.
  • Small enterprise: fewer than 50 employees and annual turnover and/or annual balance sheet total not exceeding €10m.
  • Micro-enterprise: fewer than 10 employees and annual turnover and/or annual balance sheet total not exceeding €2m.
• For more information about eligibility please see this link.

Supervising Authority

National Bank of Hungary

See this link for further information.

Availability

From 20 April 2020

Government Measure

MFB Crisis Loan Program:

• Eligible entities may apply for loans for working capital, investment, operating and refinancing purposes.
• The State guarantees 80% of the principal amount of the facility.
• Finance terms of up to ten years for investment loans and up to three years for working capital loans and refinancing loans.
• The maximum amount of a loan facility available for an SME is HUF 150m (approx. €428.57k).
• Total available amount under this program is HUF 180b (approx. €514m).

MFB Competitiveness Program:

• Eligible entities may apply for loans for working capital, investment, acquisition, operating and refinancing purposes.
• The State guarantees 80% of the principal amount of the facility.
• Finance terms of up to fifteen years for investment, acquisition, operating and refinancing loans and up to three years for working capital loans.
• The minimum amount of a loan facility available for an eligible entity is HUF 1b (approx. €2.85m) the maximum amount is HUF 10b (approx. €28.5m).
• Total available amount under this program is HUF 150b (approx. €428m).

MFB Vis Maior Guarantee:

• Eligible entities may apply for guarantees for working capital loans and investment loans;
• The State guarantees 90% of the principal amount of the facility.
• Maximum tenor of the guarantee is six years
• Maximum amount of the guaranteed facility is HUF 10b (approx. €28.5m);
• Total available amount – HUF 50b (approx. €128m).

Eligibility

Must be Hungarian based SMEs (see definition above) in respect of the MFB Crisis Loan Program

Must be Hungarian based SMEs (see definition above) and, in respect of the MFB Crisis Loan Program and MFB Vis Maior Guarantee, a large enterprise.1

For more information about eligibility please see:

• MFB Crisis Loan Program
• MFB Competitiveness Program
• MFB Vis Maior Guarantee
• Press release (in English)

Supervising Authority

Enacted by a Hungarian Government Resolution

Availability

From 22 April 2020

Loan request shall be submitted until 30 April 2021 in respect of the MFB Crisis Loan Program.

Loan request shall be submitted until 30 April 2022 in respect of the MFB Competitiveness Program

Guarantee request shall be submitted until 31 December 2020 in respect of the MFB Vis Maior Guarantee

Government Measure

Debtors under any credit, loan and financial leasing agreement can defer all of their payment obligations.

The period of the payment moratorium will expire on 31 December 2020; however, it may be further extended by the Government.

Modification of repayment dates under the loan agreements will also amend the ancillary and non-ancillary supplementary obligations (including guarantee agreements and guarantee declarations).

The interest (and also fees) accumulating but not paid during the payment moratorium cannot be capitalised with the principal payments, but shall be paid following the payment moratorium annually in equal amounts.

Duration of the loan agreements will have to be extended so that the amount of the repayment instalments, including principal and interest, following the payment moratorium shall not exceed the amount of the repayment instalments originally agreed.

Eligibility

Applicable to loan agreements in relation to which a drawdown under the facility has occurred prior to 18 March 2020.

Supervising Authority

Enacted by a Hungarian Government Decree

Availability

From 19 March 2020 until the emergency situation is upheld

Government Measure

Non-residential lease agreements cannot be terminated by unilateral termination of the lessor until 30 June 2020 in sectors that are most affected by the coronavirus outbreak (specifically tourism, hospitality, entertainment, gambling, film, performing arts, event organizer and sport service provider industries). In addition rent amounts cannot be increased during the state of emergency declared by the Hungarian Government.

Eligibility

Although no criteria has been published, we understand that the grant scheme applies to all business operating in Hungary.

Supervising Authority

No specific supervisory entity designated. This grant has been made part of the civil legislation and hence enforceable by the countries civil courts in the event of a legal dispute.

Availability

From 19 March 2020 to 30 June 2020

Government Measure

In the framework of corporate bond purchase programme, the Bond Funding for Growth Scheme (“BFGS”), the National Bank of Hungary purchases bonds issued by the eligible entities.

The total amount available under the BFGS, is HUF 450b (approx. €1,285b). The minimum amount of the bond to be issued shall be HUF 1b (approx. €2.85m).

The Bank of Hungary’s maximum exposure to a given group of corporations has been raised from HUF 20b (approx. €57m) to HUF 50b (approx. €128m).

The maturity of securities eligible for purchase under the BFGS is 20 years.

Eligibility

Non-financial enterprises having a registered seat in Hungary and that have a credit rating of at least B+ according to a credit rating agency approved and supervised by ESMA and approved by the National Bank of Hungary in terms of monetary eligibility criteria.

Supervising Authority

National Bank of Hungary

Availability

From 20 April 2020 until fund is available

Government Measure

• EXIM Indemnity Loan Program - amount of the loan: up to twice the annual wage costs; or up to 25% of annual turnover of 2019; a higher amount if supported by a liquidity plan. Discounted interest rate of 0,1%-2,3% (HUF); 0,1%-1,69% (EUR); 2,25%-4,00% (USD).
• EXIM Indemnity Credit Coverage Program -amount of the loan: up to twice the annual wage costs; or up to 25% of annual turnover of 2019; a higher amount if supported by a liquidity plan.
  Extent of the guarantee: SMEs: 80%∇of the principal amount; large company: 50% of the principal amount
• EXIM Indemnity Credit Insurance Program - no details are available yet.

Eligibility

(i) Companies carrying out exporting activities or (ii) suppliers of exporters or (iii) companies with exporting potential which were not qualified as a company in difficulty on 31 December 2019, but due to the impacts of the coronavirus crisis it became a company in difficulty or one of the following criteria is met:

• Decrease in net turnover;
• Deterioration of liquidity ratio;
• Decrease in supplier term;
• Redundancies / salary reduction;
• Decrease in order backlog;
• Increase in customer term;
• Plant closures / shift reduction;
• Investment delay;
• Decrease in operating profit.

Please note that the definition of a company in difficulty is a complicated one under Hungarian law, with multiple exemptions. The key points can be summarized as follows:

1. A company with more than half of its capital disappeared; or
2. It is subject to collective insolvency proceedings; or
3. It is still subject to a restructuring plan; or
4. In case of a large enterprise, its debt to equity ratio exceeds 7.5 and the EBITDA interest coverage ratio is below 1.0 for the past two years.

Supervising Authority

Magyar Export-Import Bank Zrt.

Availability

From 27 April 2020 until 31 December 2020

Government Measure

Can be provided in the form of a non-refundable budget support through tenders.

Maximum amount of the support is EUR 800,000 and it shall be adjusted to the value of the investment as follows:

(a) between €150k and €300k, the amount of the competitiveness support is 30% of the value of the investment,
(b) between €300,001 and €500k, the amount of the competitiveness support is 40% of the value of the investment,
(c) above €500k, the amount of competitiveness support is 50% of the value of the investment

Eligibility

Must be a medium-size or large enterprise having its registered seat, site or branch in Hungary in any industry and economic area, except certain activities (e.g. steel industry, primary agricultural production, coal industry, commercial activities, etc.) that:

(a) certifies that it did not qualify as a firm in difficulty on 31 December 2019, but became one as a result of the coronavirus epidemic or experienced other financial or economic difficulties,
(b) certifies that, as a result of the coronavirus outbreak, the net sales revenue or the value of its order backlog has fallen by at least 25%,
(c) declares that it is not responsible for the economic downturn and has acted with due care,
d) declares that it is not insured for the incurred losses or that it is not possible to fully compensate the damages incurred on the basis of the insurance,
(e) undertakes to maintain the base number of its staff (employees) until the completion of the investment, but at least until 31 December 2020,
f) undertakes to make an investment of at least €150k in Hungary by 30 June 2021,
(g) declares that it has not started the investment before submitting its application.

Supervising Authority

Ministry of Foreign Affairs and Trade

Availability

From 17 April 2020

Government Measure

Can cover up to 18 months ' wages in priority sectors, but at least 9 months' wages in all sectors, in addition to which SMEs can also apply for general purpose overdraft loans.

Finance terms of up to two years, and the maximum loan amount is HUF 750m (approx. €2,143k).

Can be used for advance payments, personal expenses, any other personal payments, benefits.

The net interest rate on the loan is 0.1%. Grace period for interest payments until the end of 2020, and the grace period for repayment of principal is 9 months.

Eligibility

Must be an SME without overdue public debt or overdue credit debt, which undertakes to retain at least 90% of its employees. Please note that the business terms of Kavosz Zrt. contains additional eligibility conditions.

Supervising Authority

The loans are available from Kavosz Zrt., which runs the Széchenyi Card Programme. Companies have access to the credit resources through their account holding banks.

Availability

From 15 May 2020

Government Measure

The term of the general-purpose overdraft loan is two years, the loan can be applied for by any company that was founded last year at the latest.

The maximum loan amount is HUF 100 million (approx. €285,700), the net interest rate is 0.1%

Government Measure

The term of the liquidity loan is up to 3 years, the maximum loan amount is HUF 250m (approx. €714,300) the net interest rate is 0.2%.

Eligible enterprises may apply it for general-purposes (including refinancing of existing loans)

Eligibility

Must be an SME without overdue public debt or overdue credit debt. Please note that the business terms of Kavosz Zrt. contains additional eligibility conditions.