De minimis aid
Let’s start at the beginning, that is, by explaining what de minimis aid is. This is a form of support for entrepreneurs (especially in the SME sector), resulting from the work of the European Commission. This solution is governed by its own laws, which are worth bearing in mind. First of all, de minimis aid must not change the balance of power between competing entities, must not affect trade between EU countries, and each company has a de minimis limit setting the maximum amount of state aid it can receive: 100 thousand. Euros (gross) for companies operating in the road freight transport sector and 200 thousand. Euros for other companies that are not excluded from receiving de minimis aid. These limits are valid for a period of three years.
De minimis guarantee – what is it?
One form of de minimis aid is a guarantee provided by the Bank Gospodarstwa Krajowego. It serves as collateral for the repayment of loans (working capital or investment), granted to companies in the SME sector. There are certain rules associated with the BGK guarantee:
De minimis guarantee for investment loan
An entrepreneur who takes out an investment loan can count on a BGK guarantee for a period of up to 99 months, securing up to 60 percent of the loan amount (this has been the case since July 1, 2021 – until June 30 it was 120 months and up to 80 percent of the loan amount, respectively).
The guarantee can apply to both zloty and foreign currency loans, but companies cannot count on the guarantee to cover the cost of obtaining or servicing the loan, as well as interest on the debt. In addition, the guarantee must be secured by a blank promissory note from the entrepreneur.
Important!
It is worth remembering that as of July 1, 2021, Bank Gospodarstwa Krajowego charges a commission of 0.5 percent of the guarantee amount (until June 30, 2021 it was 0 percent).
De minimis guarantee for working capital loan
Almost the same rules apply to guarantees given for revolving loans – the difference is in the maximum period of the guarantee. In the case of a working capital loan, this will be a maximum of 27 months. Here, too, there has been quite a change, as you can get a warranty for up to 75 months until June 30, 2021).
De minimis guarantee for factoring
Also the factoring service can be covered by the BGK guarantee – the aim is to ensure the liquidity of companies. PragmaGO is one of the factories cooperating with BGK, which means that companies using online factoring can get a de minimis guarantee for the limit at PragmaGO!
The deadline for the guarantee is June 30, 2021, it can secure up to 80 percent of the limit amount, and is granted for up to 27 months. BGK’s factoring guarantee also has different commission rates, depending on the period for which the factoring limit is granted and the status of the company.
- For SME companies, the commission is 0.25% if the limit is granted for no more than one year, and 0.55% if the limit is valid for more than 1 to 2 years.
- For large companies, the commission is 0.5% for a limit granted up to 1 year, and 1.15% if the limit lasts more than 1 to 2 years.
Purpose of funds covered by the guarantee
An entrepreneur cannot spend the funds for any purpose, especially if he has obtained a BGK de minimis guarantee. We have checked exactly what restrictions apply to these aspects.
The company cannot:
- purchase receivables, financial instruments or organized parts of an enterprise;
- repay with funds from a loan of another credit or loan, which was granted for the purchase of receivables, financial instruments, organized parts of an enterprise or investment financing;
- finance purchases, investments and other expenses incurred before it obtained an investment loan;
- make capital investments.
The company can:
- If it has obtained an investment loan:
- Purchase machinery, equipment, tools or a fleet of vehicles;
- Build, expand and modernize facilities used in the conduct of business.
- If it has obtained a working capital loan:
- Pay off another loan/commitment in this way;
- Cover the company’s growth objectives;
- Pay invoices related to the purchase of goods and services
- Pay income tax, VAT or Social Security contributions.
