The formation of the Guarantee Fund is an important step towards the support and well-being of existing and newly established small and medium-sized enterprises (SMEs). The Fund was designed to support SMEs in our country, not only by offering them the necessary liquidity and the necessary funds for investments, but also the ability to reduce their financing costs. The zero guarantee fee, the grace period and the interest rate subsidy make funding more affordable, while revolving credit provides the flexibility that SMEs need to meet the ever-changing market needs. In addition, investment purpose and special-purpose working capital provide SMEs with the ability to implement their strategic investments, to expand and strengthen their competitiveness.
Budget: €300,000,000
The budget is allocated per Sub-Fund as follows:
- €230million for the ‘General Entrepreneurship’ Sub-Fund, where leverage creates a portfolio of €1.642 billion.
- €30million for the ‘Start-up Entrepreneurship’ Sub-Fund, where leverage creates a portfolio €150 million.
- €40million has been allocated for the interest rate subsidy.
The total leverage created by the TEPIX III Guarantee Fund amounts to €1.792 billion.
The Action is co-funded by the European Regional Development Fund (ERDF) and national funds and is implemented by the Hellenic Development Bank (HDB).
Types of Loans
- Investment purpose loans
- Special Purpose Working Capital Loans
- Special purpose revolving credit working capital loans
Sub-funds and beneficiaries
The TEPIX III Guarantee Fund is divided into two (2) Sub-Funds and addresses specific categories of enterprises.
- The ‘General Entrepreneurship’ Sub-Fund targets all SMEs.
- The ‘Start-up Entrepreneurship’ Sub-Fund targets micro and small businesses with up to 5 years of operation.
Loan Amount
The maximum loan amounts are defined by Sub-Fund as follows:
For the ‘General Entrepreneurship’ Sub-Fund
For investment loans:
- The maximum amount shall be €10 million (Aid scheme, Article 21, par.3 of Reg. (EU) 651/2014).
- The maximum amount shall be €1.6 million (Aid scheme, Article 21, par. 18 of Reg. (EU) 651/2014 namely de-minimis aid).
For special purpose/revolving credit working capital loans
The maximum amount shall be €500,000 (Aid scheme, Article 21 of Reg. (EU) 651/2014).
For the ‘Start-up Entrepreneurship’ Sub-Fund
For investment loans:
The maximum amount shall be €1.5 million (Aid scheme, Article 22 of Reg. (EU) 651/2014).
For special purpose/revolving credit working capital loans
The maximum amount shall be €200,000 (Aid scheme, Article 22 of Reg. (EU) 651/2014).
The minimum loan amount amounts to €10,000 and concerns both Sub-Fund categories.
Guaranteed percentage
The TEPIX III Guarantee Fund provides the following guaranteed percentages per Sub-Fund:
- It provides a guaranteed percentage of 70% for ‘General Entrepreneurship’ Sub-Fund.
- It provides a guaranteed percentage of 80% for the ‘Start-up Entrepreneurship’ Sub-Fund.
Maximum collateral percentage
Beyond the guarantee of provided by the TEPIX III Guarantee Fund, it is possible for credit institutions to request additional securities (personal and/or real securities). Specifically:
- Personal securities are requested for loans up to €50,000.
- Real securities amounting to a maximum of 30% of the total loan are requested for loans in excess of € 50,001.
Duration of loan-guarantee
The duration of the loan is defined by the Sub-Fund and the aid scheme that it falls under, as follows:
For the ‘General Entrepreneurship’ Sub-Fund
Investment Loans
- The duration corresponds to 5-12 years including a grace period of 0-24 months (Article 21 par.3 of Reg. (EU) 651/2014).
- The duration corresponds to 5-10 years including a grace period of 0-24 months (Article 21 par.18 of Reg. (EU) 651/2014).
Special Purpose Working Capital Loans
The duration corresponds to 2-5 years including a grace period of 0-12 months.
Special purpose revolving credit working capital loans
The duration corresponds to 0-3 years with annual renewal. At the end of a 3-year period, it is automatically converted to principal and interest / principal-only loan for 2-year duration.
For the ‘Start-up Entrepreneurship’ Sub-Fund
Investment Loans
The duration corresponds to 5-10 years including a grace period of 0-24 months (Aid scheme, Article 22 of Reg. (EU) 651/2014).
Special Purpose Working Capital Loans
The duration corresponds to 2-5 years including a grace period of 0-12 months (Aid regime, Article 22 of Reg. (EU) 651/2014).
Special purpose revolving credit working capital loans
The duration corresponds to 0-3 years with annual renewal. At the end of a 3-year period, it is automatically converted to principal and interest / principal-only loan for up to 2 years (Aid scheme, Article 22 of Reg. (EU) 651/2014).
Grant and Fund operation requirements
The TEPIX III Guarantee Fund subsidises 100% of the guarantee commission for the duration of each loan.
The TEPIX III subsidises part of the loan’s interest rate. The subsidy covers the first 2 years of the loan (from the 1st disbursement) and reduces the loan interest rate by 2% (or by 200bps) for enterprises operating in the Attica & South Aegean regions and by 3% (or by 300bps) for enterprises operating in other regions. This significantly reduces the total cost of borrowing for the enterprise.
Every credit institution participating in the Fund is obligated to reduce the interest rate on each loan significantly below the market average rate. The maximum interest rate that can be charged per investment category, based on offers by each credit institution, is listed in the interest rate and collateral table posted on the HDB website.
The maximum amount of security that a credit institution may request for each loan cannot exceed 30% of the principal of the loan.
For funding up to €50,000, the credit institution may only ask for personal securities.
It is clarified that in the ‘General Entrepreneurship’ Sub-Fund for working capital loans, enterprises are entitled to an interest subsidy provided they have not received a business loan from another HDB programme in the past.
Application submission procedure
To join the TEPIX III Guarantee Fund, the prospective enterprise must submit an online application:
- On the KYC (Know Your Customer) platform of the Hellenic Development Bank via the website https://kyc.hdb.gr/. For each completed application and after a series of eligibility criteria evaluations, the application is forwarded to the credit institutions chosen by the interested party for the submission of a non-binding offer. If the application is initially accepted, meaning the interested party receives a non-binding offer, a unique code is issued.
- To the Integrated State Aid Management Information System (iSAMIS), via the website https://app.opske.gr/where the unique code is entered from the HDB KYC platform for the credit institution.
- The credit institution from which it wishes to receive funding and has already received a non-binding offer through the KYC for the assessment of the application and required supporting documents.
In addition, the enterprise completed a self-assessment questionnaire on 3 key criteria: Environmental, Social and Corporate Governance (ESG) on the HDB ESG Tracker platform, via the website https://esgtracker.hdb.gr/. The completion of this questionnaire is necessary in order to be able to submit the funding application to the Bank. It is clarified that the self-assessment results do not constitute a criterion for the enterprise’s eligibility in the programme.
Collaborating Banks
- PANCRETA BANK SOCIETE ANONYME
- COOPERATIVE BANK OF THESSALY LLC
- ALPHA BANK SA
- NATIONAL BANK OF GREECE SA
- COOPERATIVE BANK OF KARDITSA LLC
- COOPERATIVE BANK OF CHANIA LLC
- OPTIMA BANK SA
- PIRAEUS BANK SA
- ATTICA BANK SOCIETE ANONYME
- EUROBANK SA
- COOPERATIVE BANK OF EPIRUS LLC
