Portfolio Guarantees for Factoring Transactions
What are the benefits?
Instrument of “Portfolio guarantees for factoring transactions” (“Portfolio guarantees for factoring”) is there to assist micro, small, and medium businesses (SME) with funding of commercial transactions.
What companies are eligible?
Micro, small, and medium businesses.
What is the maximum amount?
Maximum limit per factoring is EUR 1,875,000, and with businesses engaged in freight services by roads, the maximum limit is EUR 937,500. Maximum funding period of a factoring transaction is 12 months. Upon expiry of the funding period of a factoring transaction, a new factoring transaction may be offered to SME.
How does it work?
Each financial body, involved in implementation of the instrument of portfolio guarantees for factoring, shall offer a 80% guarantee to the factoring transactions part of the portfolio; however, total value of benefits cannot exceed the ceiling set at 20% of the value of guarantees included in the portfolio of factoring transactions.
Portfolio guarantee for factoring is offered in terms of de minimis aid as per Regulation No. 1407/2013.
A secured portfolio can include both export and local factoring transactions (with a right of recourse).
Under the instrument above, factoring transactions are funded and documents drawn by financial bodies in line with their own internal rules and procedures.