Romanian state fund for SMEs cuts guarantee fee to 1.95 percent

Romanian National Guarantee Fund for SMEs (FNGCIMM) cut the guarantee fee charged to the beneficiaries of the Start-up Nation Program starting from July 25, up to 1.95 percent of the loan amount, according to a press release.

“The National Loan Guarantee Fund for SMEs (FNGCIMM) is one of the main partners of the Start-Up Nation Government Program, providing also in the second edition of the program a dedicated guarantee product for bridge loans granted by CEC Bank and Banca Transilvania. The FNGCIMM has positioned itself in the 2017-2018 campaign as the main sponsor of the declared eligible start-ups and requesting the bridge credit, with the repayment obligations guaranteed by FNGCIMM at a maximum of 80 percent. Starting July 25, 2019, as a result of the positive dynamics of the performance of the Loan Guarantee under the Start-up Nation Program and the efficiency of some internal mechanisms of the company, FNGCIMM reduced the guarantee fee to 1.95 percent of the value of the,” the communiqué said.

General Manager of FNGCIMM, Gheorghe Lapadat, explained that the risk of granting guarantees under the program has been reassessed and costs have been adjusted to facilitate access to credit.

“Reducing financing costs is one of the major goals of SMEs in accessing funding sources. So we reassessed the risk associated with providing guarantees under the START-up Nation Program and, in order to respond adequately to the specific requirements of our partners, adjusted the costs incurred to create the premises of facilitating access to credit,” Gheorghe Lapadat said.

The commission will apply to new guarantees issued to Beneficiaries of the Start-up Nation Program, including those with financial statements, provided that, at the time of applying for the guaranteed loan, they are less than 36 months old from the date of establishment.

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The guarantee fee is an eligible expense which can be settled from the grant awarded under the Start Up Nation program.

For the first phase of the Start-up Nation Program, FNGCIMM was an active partner for some 5,100 start-up entrepreneurs, guaranteeing nearly RON 1 billion.

The National Credit Guarantee Fund for Small and Medium Enterprises is a non-bank, venture capital fund established to facilitate SME access to finance by providing guarantees for financing instruments contracted from commercial banks or other sources . FNGCIMM is organizing government programs aimed at economic recovery, business development and job creation and support, functioning as a joint-stock company, with sole shareholder of the Romanian State, under the prudential supervision of the National Bank of Romania.

The FNGCIMM SA – IFN guarantee is up to 80 percent of the loan amount, not exceeding EUR 2.5 million per beneficiary and issued at the request of the partner funding institutions for approved financing, based on the analysis of documents submitted by the sponsor.

FNGCIMM SA – IFN collaborates with 27 financial institutions on the basis of working conventions. The guarantee of FNGCIMM SA – IFN is the most liquid collateral, payable within 90 days of the fund’s payment request, accompanied by complete documentation, over a minimum of 2 years, the average duration of execution of a mortgage.