Businesses, applying to a credit institution for a business loan, may often encounter a problem of unattractive or insuffiecient security deposit. INVEGA may guarantee the repayment of losses arising from the investments made by financial institution in SMEs for loans and leasing transactions as well as financial credits granted for large companies up to 80 percent by offering individual and portfolio guarantees:

Individual guarantees – provided by INVEGA with an intensity of 80 percent, offer solutions to unattractive or insufficient conditions and facilitate the access to the funding sources.

Portfolio guarantees – secures the repayment of 80% of the principal amount of loan, leasing or factoring to a financial institution. With Portfolio guarantees financial institutions require a smaller down payment and apply a lower interest rate as compared to market conditions.

In order to use these financial instruments and obtain a guarantee, interested party should apply to a bank or any other credit institution (e.g., a credit union) and negotiate on its loan/leasing conditions (amount of principal, currency, maturity, repayment schedule, interest rate, etc.). Onwards, the credit institution will assess the adequacy of security deposit provided and decide whether to grant the interested party. If the security deposit is insufficient, the credit institution can:

1. apply with INVEGA for issuing a guarantee and submit required documents;
2. include the credit in the portfolio of the credit institution.

A borrower is charged a one-time guarantee fee for the issued guarantee.
Currently, the amount of the guarantee fee depends on the requested guarantee amount. The guarantee fee is paid for the initial validity period of the guarantee (until the part of the loan guaranteed by INVEGA has been repaid according to the loan repayment schedule).
The amount of the guarantee fee depends on the borrower’s age. The amount of the guarantee fee is equal to 4 % on the guarantee amount for enterprises and entrepreneurs operating for up to 3 years and to 3 % on the guarantee amount for enterprises and entrepreneurs operating for 3 years and longer.
In cases where the borrower has repaid the guaranteed part of the loan prematurely or has not fully used the guaranteed loan, the guarantee fee is not recalculated and refunded.

At present, the State promotes and supports enterprises and entrepreneurs who take loans guaranteed by INVEGA by paying part of the guarantee fee for the borrower.
The guarantee fee is subsidized for up to EUR 579,240 of the guarantee amount. Any amount in excess of EUR 579,240 is not subsidized and a SME must pay the whole price (p. 5.2 of the Regulations on the Guarantee Fee Subsidies).
The rate of subsidies depends on the borrower’s age and the SME status. For borrowers, SMEs, 3/4, 2/3 or 1/2 of the INVEGA guarantee fee can be subsidised:
• new enterprises (operating less than 3 years) and entrepreneurs are financed 3/4 of the guarantee fee;
• very small (micro companies) and small companies and entrepreneurs and operating for 3 years and longer are financed 2/3 of the guarantee fee;
• medium-sized companies and entrepreneurs operating for 3 years and more and employing up to 250 employees are financed 1/2 of the guarantee fee.
If a SME has obtained several guarantees, their balances are summed up. The guarantee fee is subsidized if the amount of guarantee balances does not exceed EUR 579,240.
The age of the SME entity is established according to the registration date of the enterprise in the Register of Legal Entities.

The guarantee fee is also payable when the loan repayment schedule is revised by the mutual agreement of the borrower and the credit institution and the guarantee is extended as a result of a new schedule. In this case the guarantee is calculated on the amount of the balance of the extended guarantee by applying the same amount as at the time of the issuance thereof (3 or 4 %)

In the case of an increase in the guarantee amount or extension of the guarantee, the guarantee fee is calculated according to the changed loan repayment or leasing payment schedule submitted by the credit institution or leasing company and having regard to the original loan repayment or leasing payment schedule. No minimum guarantee fee is charged for any changes.

Upon the borrower’s request, the portion of the paid guarantee fee is refunded in case the guarantee is waived, or if the loan funds were not disbursed (the financial institution must not have disbursed even a loan of EUR 0.01). In this case, the portion of the guarantee fee is repaid for the unused validity period of the guarantee (except for the period from the issuance of the guarantee until the submission of the request to refund part of the guarantee fee to INVEGA (registration).

INVEGA guarantee, partial financing of the guarantee fee and interest, are immaterial forms of state aid to business provided according to de minimis rule, i.e. aid granted during 3 years may not exceed EUR 200,000.