Small and medium-sized enterprises show a great interest in the cheap loans given through the Entrepreneurial Fund III in the first days of the activation of the program. Borrowing costs are drastically reduced with TEPIX III,
However, entrepreneurs should also be very careful in choosing which bank to work with each conducts its own politics and are considered very large differences in interest rates.
THE: Development Bank of Greece The organization that administers the program has published detailed data on lending rates from each bank and additional important information such as collateral requirements. It is noted that loans are divided into two categories: investment and working capital loans.
In particular, banks offer fixed interest rates for investment loans from a maximum of 7.00% to 10.80%. It is noted that there are few products in this category with a fixed interest rate, five in total.
All banks excepted Karditsa Cooperative, they provide investment loans with a floating interest rate based on the 3-month Euribor.
In this case, the maximum spread (Euribor premium) ranges from 2.00% to 7.40%. Some banks have loans at a lower rate for larger businesses and separately at a smaller rate for smaller ones.
The maximum collateral limit as a percentage of the loan amount is set at 100% for all banks and all products, which is also the maximum allowable limit of the program. The only exception Small and medium business loans of Piraeus Bank which are given only with no debt collateral.
When it comes to loans available for working capital, they are also large differences between individual banks.
There are only five fixed rate products with maximum interest rates ranging from 8.05% to 10.80%. For floating rate products, the 3-month Euribor spread fluctuates 2.00% to 7.40%.
Most loans are granted collateral up to 100% of the loan. Exception: two from Eurobank and one from Piraeus Bank, which are offered without real collateral.
Let us remind that the TEPIX III credit fund was created within the framework of the Entrepreneurship III fund to provide investment loans and special purpose working capital loans to SMEs on particularly favorable terms, as reported by the Hellenic Development Bank.
For each loan, the Fund pays 40% of the capital without interest, and the remaining 60% is provided through the Credit Institution, charging appropriate interest rates according to its credit policy, reduced by at least 25 bps (basis point).
In addition, the Fund may subsidize part of the interest rate applied by the credit institution to its funds (3%) for the first 2 years of the loan (from the 1st disbursement).
The fund’s budget is 200 million euros. Including the 60% participation of credit organizations in each grant, a total credit portfolio of about 450,000,000 euros is formed.
The benefits for business are significant. The funded company is fully exempt from interest on the part of the loan that is co-financed by the Fund (ie 40% of each loan), given that this amount is provided by the Fund without interest.
The fund may subsidize a portion of the interest rate applied by the credit institution to its funds (ie 60% of each loan). The subsidy extends to the first 2 years of the loan (from the 1st disbursement) and reduces the interest rate of the Credit Organization by 3%, which accordingly reduces the final interest rate of the loan.
Each credit institution participating in the Fund is required to reduce the interest rate of each loan by at least 25 basis points (bps) per year compared to the interest rates that would apply to the corresponding financing without the participation of the Fund.
The amount of the loan may vary as follows:
Investment loans.
Action 1.1. Loans through De Minimis (Reg. (EU) 2831/2023) from €20,000 to €1,500,000
Action 1.2. Loans through GAZ (No. 21) from EUR 20,000 to EUR 8,000,000
Special purpose working capital loans.
Loans through De Minimis (Reg. (EU) 2831/2023) from €10,000 to €500,000
The term of the loan is defined as follows:
For investment loans: 5 to 12 years, including any grace period of up to 24 months.
For special purpose working capital loans, 2 to 5 years, including any grace period of up to 12 months.
