Loan for "0"% designated for investment purposes
About this good practice
Starting a business, and then its development, involves the need to provide financing. Entities of the SME sector usually have a low level of equity and have difficult access to bank loans. The loan fund operating at PRFD gives a chance to overcome these barriers. PRDF, in order to provide entrepreneurs favorable financing conditions, acquires funds from various sources. These are both own funds as well as funds acquired under the regional and national programs. The loan for ”0” is granted from the resources of the Regional Operational Program. The regional program for the Podlaskie Voivodeship is financed from two sources: the ERDF and the ESF. The rules for granting loans: the loan for ”0” is granted for investment purposes, including: purchase of machines and devices, purchase, construction, adaptation or modernization of production, commercial or service facilities, implementation of new technical and technological solutions, This may also be available for used machines. There is no innovation requirement. Terms of granting loans: interest rate on the 0% loan on an annual basis, the max loan amount - PLN 500,000 (ca. EUR 116,300), the max loan period - 60 months, the max grace period in repayment of capital installments - 6 months, own contribution-20%, commission-from 1% to 5% (depending on the loan period:1 year-1%, 2 years-2%, 3 years-3%,4 years-4%,5 years-5%). The Beneficiaries of the practice are: SMEs, people starting a business.
Resources needed
Human resources:
- Minimum 5 people are needed to operate the programme.
The fund manages PLN 25 million (ca. EUR 5.8 million) from this programme.
Evidence of success
From the beginning of the project until today PRDF granted 327 loans for PLN 46,909,300 (ca. EUR 11M).Capital involvement exceeded 98%, this means that funds from the repayment of loans already granted are being made available to entrepreneurs on an ongoing basis in the form of loans.In 2015,the amount of loans increased by 50% compared to the previous year and doubled in comparison to 2013.Thanks to these measures,jobs were created,companies gained new markets or expanded the range of products
Potential for learning or transfer
The good practice may prove to be interesting because the use of repayable instruments may have a positive impact on the region's development, generating a positive value in the economy.
The money from the returned loan can be borrowed again and it is immediately available again after making the repayment. The same money is in constant circulation and constantly supplies the economy.
Such instruments will also have to compensate for the reduction of EU funds after 2020.
Further information
Website
Good practice owner
You can contact the good practice owner below for more detailed information.
Podlasie Regional Development Fundation