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The European Commission has announced that it has approved a 255 million euro guarantee scheme to support small and medium-sized companies in Bulgaria during the Covid-19 epidemic, BTA reported.
The scheme has been approved under the relaxed temporary state aid rules. Bulgaria has notified the EC of a BGN 500 million guarantee scheme for existing or new loans in support of companies affected by the outbreak.
After the capital of the Bulgarian Development Bank was raised through state funds for BGN 500 million (€ 255 million), the bank will provide public guarantees for investment loans and working capital loans for micro, small and medium-sized companies affected by the epidemic in the country, says the message. The scheme seeks to limit the dangers of loans to companies most affected by the economic impact of the epidemic. It will help companies meet their immediate working capital and investment needs and help them have sufficient funds available to continue their operations.
The Commission has determined that the Bulgarian scheme is eligible, limiting for each company the amount of the loan in question to the extent necessary to cover its liquidity needs for the foreseeable future; guarantees will be provided only at the end of the year; warranties will be limited to five years; the guarantee covers up to 80 percent of each loan; guarantee premiums will not exceed the levels provided for in the relaxed provisional state aid rules.
The EC has concluded that the scheme is necessary, appropriate and proportionate to overcome serious difficulties in the economy of an EU country under current regulations.
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