Romania’s support program for SMEs successfully launched on second try. Over 2,800 firms apply in 1 hour
Romania’s Government successfully relaunched the IMM Invest platform on Tuesday morning, April 28, after a failed attempt on April 17, when the platform crashed due to the high traffic. In the meantime, cyber specialists of the Romanian Intelligence Service (SRI) and the Special Telecommunications Service (STS) have worked together to rebuild the platform.
The IMM Invest website is a key component in the Government’s program to support small and medium enterprises (SMEs) affected by the COVID-19 crisis. Local SMEs can use the platform to submit financing applications within a Government-backed loan program.
Over 1,000 companies submitted financing requests within the first half an hour after the platform went live.
The Government is willing to guarantee loans of up to RON 15 billion (EUR 3.09 bln) within this program. It expects about 44,000 companies to apply to this scheme. Finance minister Florin Citu has called it “the biggest program to support SMEs in the last 30 years.”
The program aims to help local firms with liquidity in a difficult period when their activity has been strongly impacted by the COVID-19 pandemic and the restrictions imposed by the authorities to prevent the mass spreading of the virus.
The state will guarantee up to 90% of the value of loans granted by banks enrolled in this program. Moreover, the state will also cover the financing costs, including interest and fees, until the end of this year. Companies will not pay any fees for paying back their loans earlier than scheduled.
Companies can get two types of loans: for investments and working capital. The credits for investments are up to RON 10 million (EUR 2.06 mln) and can be paid back in 72 months, with a grace period of up to 18 months. The interest rate is capped at ROBOR 3M (interbank lending rate for three months) plus a margin of 2% per year.
The working capital loans are up to RON 5 mln (EUR 1.03 mln) for medium enterprises and up to RON 1 mln (EUR 206,000) for small enterprises. They can be paid back in 36 months, with the possibility to roll them over for another 36 months. The interest rate is capped at ROBOR 3M plus 2.5% per year.
However, despite the state guarantees, local banks will evaluate the loan applications based on their prudential guidelines, which is why only companies with a solid financial track record will qualify.
The loans granted within this program can’t be used for refinancing existing loans.
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