The new State Aid Program regarding the subsidy of interests for Small and Medium Sized Companies

The new State Aid Program regarding the subsidy of interests for Small and Medium Sized Companies has been approved and will be starting accepting applications from the 15th of April 2020

  • What it covers: All loan interests from standing obligations for the months April, May and June 2020 (3 months)
  • Which businesses it covers? Businesses affected by the COVID-19 pandemic, where their Business Code is on the official list of KADs and the business size is small or medium
  • Are there exemptions? Yes, businesses affected by the pandemic but involved in the sector of primary producing agricultural or fishing products as they are subject to different state aid regulations 
  • What kind of legal entities it covers? All legal entities including freelancers 
  • What are the sizes of businesses covered: Businesses with less than 250 employees and annual turnover less than 50millions EUR
  • What kind of loans are eligible? All fixed term loan agreements, bond loans and revolving credits
  • Performing or not? Performing by the 31st of December 2019, meaning with up to 90days of delay days (Bucket 3) 
  • What if the business has already received a suspension of payments according to COVID-moratorium? The company can apply and receive the aid for the interests regardless this fact 
  • What If a company has already paid the April installments? The instalment is covered by the aid and Banks are responsible to clear the amounts with the rest of the debtor’s obligations
  • Deadlines? The program starts on the 15th of April and ends on the 30th of June
  • What is the Bank’s role? According to Section 3 of the Invitation, we are one of the Implementing Bodies of this Action
  • What are the Bank’s obligations?
    • To implement the procedure of Chapter 9

    • To verify the requirements of Chapter 4

    • To transmit data to the Special State Service for the data described in chapter 6

    • To maintain files for 10 years if audited

  • Is it obligatory to participate? Yes all Financial Institutions operating in the country must participate to preserve the principle of equal treatment of the beneficiaries
  • Are Banks eligible beneficiaries of the Aid? No, Banks and Offshore companies are not included in the aid
  • What is the procedure of the submission? The submissions are completed wholly digitally through the portal https://www.ependyseis.gr/mis/(S(ykajynufftxsylmvnqak0pa5))/System/Login.aspx?ReturnUrl=%2fmis%2fdefault.aspx .  All required documents are to scanned and uploaded there
  • Who is assessing the submission? The Banks do through this system. 
  • What are the Banks assessing? According to Chapter 9, they assess if the requirements of Chapter 4 are valid based on the documents and inform accordingly the Special State Service
  • What are the requirements of Chapter 4? It is the eligibility of the businesses. Especially, the Banks must verify the following:
    • The beneficiary (business) has an eligible / inflicted business number (KAD) by the 19th of March 2020
    • The beneficiary is a Small or Medium Sized business according to the criteria of EU Regulation 651/2014 (attached)
    • The beneficiary has no reason to be excluded from the procedure according to Article 40, par. 1 of Law 4488/2017 regarding serious violations of Labor law (attached)
    • The beneficiary is not considered an undertaking in difficulties by the 31st of December 2019. The definition of an undertaking in difficulties in EU legislation is found in Article 2 (18) of the General Block Exemption Regulation 651/2014, (attached) 
    • Νo state aid recovery order is pending against the beneficiary
    • The total amount of state aid to be received from this Action will not exceed the amount of 800.000€ per beneficiary 
    • The beneficiary will retain the same number of employees they employ at 19.03.2020, as per 31.12.2020
    • Especially to agricultural products trading beneficiaries, they must be bound not to not to shift the aid to primary producers
  • How are the Bank’s going to perform this assessment? Through various solemn declarations and documentations provided in Annexes of the Invitation
  • How long is this assessment procedure is going to last? Until the 30th of June. After that no new submissions will be eligible. The Special State Service will be finalizing applications per month to reimburse funds but the assessments will continue for previous applications. There is no actual deadline but is going to be a lasting procedure depending on the day of application from the beneficiary
  • How is the Bank going to know about the applicant / beneficiary? The Special State Service is going to inform; thus, the Bank needs to provide the service with names and contact numbers of employees authorized to perform the procedures
  • What is the data the Bank is going to transmit to the State? The following applies: The amount of interests that derive from loan agreements valid on the 01.04.2020 and is generated for the next three months up to the 30th of June per beneficiary 
  • How is the reimbursement going to be made from the State? 
    • According to Article 11 of the Invitation the Bank must create a current account inn their system in favor of the Greek State with name: interest subsidy to deal with the effects of COVID-19
    • The Bank submits an application to the Special State Service for the credit transfer of the first instalment of the subsidy which is equal to the 40% of the amount of interests declared in total through an official letter, stating also the number of accounts
    • The Special State Service transfers the fund to the account
    • The Bank then transfers the amounts to the banking accounts of each beneficiary
    • The Bank informs the Special State Service regarding the subsidy amount each beneficiary has received with any means necessary
    • The procedure is repeated for the second & third instalment of the subsidy with an extrait that confirms that the previous amounts have been paid to the beneficiaries
  • What happens after the end of the subsidies? The Bank, when all the above are completed must submit to the Special State Service the following:
    • The total subsidy budget,
    • The paid installments with relevant dates 
    • The balance of not distributed amounts if any
    • The receipts of the reimbursements to the beneficiaries as extrait of the account

For more details on the requirements for participation in the Action, read carefully the attached Official Gazette of the Invitation and the relevant applications below: