PFR Financial Shield – support for companies to fight against the effects of the coronavirus

The Polish Development Fund (PFR) has launched a support programme for entrepreneurs.The first subventions under the PFR Financial Shield for the micro and SME sector have already been granted. The Financial Shield for large enterprises is to be launched within a few days, although it is already possible to apply for aid. 

PFR Financial Shield – three areas of business financing

The PFR Financial Shield is a support programme under the Anti-Crisis Shield. It aims to help companies combat the negative effects of the SARS-CoV-2 coronavirus epidemic by protecting the labour market and providing companies with financial liquidity in this exceptionally difficult period. Aid is worth PLN 100 billion. The funds will be transferred to microenterprises employing at least 1 employee and small, medium and large enterprises under three financing areas:

• Financial Shield for microenterprises (up to 9 employees, no self-employed) – PLN 25 billion
• Financial Shield for small and medium-sized enterprises (SMEs, up to 249 employees) – PLN 50 billion
• Financial Shield for large companies (over 249 employees) – PLN 25 billion

Micro, small and medium-sized companies can receive funding consisting of interest-free financial subventions, available in commercial and cooperative banks participating in the programme. Large enterprises, on the other hand, will soon be able to take advantage of financing available directly from the Polish Development Fund (at present, the programme’s assumptions are currently being approved by the European Commission).

Financial Shield for micro, small and medium-sized companies has already started

On 29 April, the reception of applications for interest-free financial subventions under the PFR Financial Shield began. Micro, small and medium-sized enterprises can apply for subventions, available in commercial and cooperative banks participating in the programme, if they meet certain criteria and after 12 months, they can apply for a redemption of up to 75% of the value of the subvention received.

Applications for support under the PFR Financial Shield can be submitted by micro, small and medium-sized companies employing from 1 to 249 employees. This status is set as of 31 December 2019, and in order to estimate the scale of employment the owner of the company and employees of its subsidiaries are not taken into account.

Granting is done by the PFR in the order in which applications are processed (priority is given to applications which are complete according to the procedures in force and have no gaps preventing their urgent processing). Support may be combined with other forms of assistance related to COVID-19, such as downtime benefit.

Who can apply for PFR Financial Shield subventions for micro, small and medium-sized companies:

• micro-entrepreneur “microenterprise” – an entity employing at least 1 employee and no more than 9 employees (not including the Beneficiary being a natural person) and whose annual turnover or balance sheet total does not exceed EUR 2 million
• small and medium-sized enterprise ‘SME’ – an entity employing up to 249 employees (not including the Beneficiary being a natural person) and with an annual turnover not exceeding EUR 50 million or a balance sheet total not exceeding EUR 43 million, and not being a micro-business

Other conditions for benefiting from the programme for micro and SME companies:

• a decrease in economic turnover due to COVID-19 (sales revenue) of at least 25% in any month after 1 February 2020 compared to the preceding month or the same month of the previous year,
• conducting business activity as of the date of filing the application (the company is not in liquidation on the basis of Commercial Companies Code and as of the date of filing the application no bankruptcy or restructuring proceedings were opened against it),
• conducting business activity as of 31 December 2019,
• the company as of 31 December 2019 or as of the date of filing the application was not in arrears with payments of taxes and social security contributions.

Once the application for support under the PFR Financial Shield has been processed, the entrepreneur may receive one of the three following types of answer:

• a positive decision granting the entire amount requested by the applicant entity
• a positive decision granting support of less than the amount requested
• negative decision – the applicant entity may submit a new application

Since the launch of the PFR Financial Shield on 29 April, more than 9.2 thousand micro, small and medium enterprises have already received positive decisions granting subventions. PLN 2.1 billion in total has been granted in the form of subventions.

See also: Anti-crisis shield – consulting for companies

Financial Shield for large companies directly from the PFR

The financing of large companies will be provided directly by the PFR and will be provided on an individual basis. The support includes both debt financing and capital commitment and is based on several instruments with a total value of PLN 25 billion:

• PFR Liquidity Shield for large companies in the form of liquidity financing worth PLN 10 billion,
• PFR Financial Shield for large companies in the form of preferential financing worth PLN 7.5 billion,
• PFR Capital Shield for large companies in the form of investment financing worth PLN 7.5 billion.

Applications to the PFR can be submitted now, but the programme will be launched in the coming days after getting approval from the European Commission.

Who can benefit from the PFR Shield programme for large companies:

• entities employing at least 250 employees (total number of employees in the capital group) or whose turnover exceeds EUR 50,000,000 or balance sheet total exceeds EUR 43,000,000, on a consolidated basis,
• small and medium-sized enterprises employing more than 150 employees (as of 31 December 2019), excluding the owner, whose annual turnover for 2019 exceeds PLN 100,000,000, whose financing gap according to the financial projections exceeds PLN 3,500,000, or the financing is related to the Sectoral Programme under COVID-19.

Other conditions for benefiting from the programme:

• a decrease in economic turnover (sales revenues) of at least 25% in any month after 1 February 2020 compared to the previous month or the same month last year due to the economic disruption caused by COVID-19,
• loss of production or service capacity or reception of products or services by the contracting parties due to lack of availability of components or resources, as a result of COVID-19,
• no payment for the sale, as result of COVID-19, in the amount exceeding 25% of receivables,
• lack of access to capital market or credit limits for new contracts as a result of financial market disruption,
• to be a participant of the Sectoral Programmes in relation to COVID-19,
• the company is not in liquidation and no bankruptcy or restructuring proceedings have been opened against it,
• conducting business activity as of 31 December 2019,
• non-delays in payment of taxes and social security contributions,
• tax residence in the European Economic Area, with the main real beneficiary holding no tax residence in the so-called “tax havens”.

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