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Since yesterday, 29 April, micro, small and medium-sized businesses employing 1 to 249 people can apply for grants under the Polish Development Fund’s so-called Financial Shield. Seventeen commercial banks and most cooperative banks administer the grants. Total aid is to reach PLN 100 billion, of which PLN 75 billion will go to micro, small and medium-sized companies (the remainder is for large companies). PFR estimates that 670,000 SMEs affected by the coronavirus pandemic may receive support. Applications are based on entrepreneurs’ declarations, automatically checked by PFR against bank data (identification, including NIP number), ZUS data (employment) and Ministry of Finance data (including the prior financial year’s sales revenue for SMEs).
Once that information is confirmed, the subsidy amount will be calculated. The average is expected to be PLN 80,000; the maximum PLN 324,000.
Cooperation among banks, PFR, the National Clearing House and financial institutions has produced, in a very short time, a system through which businesses can obtain specific financial aid by filling in a form through online banking.
On Monday evening, 27 April, the programme received European Commission notification, the last requirement before launch. After the technical implementation of the Commission’s final recommendations, applications will open in the following days. Bank Pocztowy, among others, has already opened applications today (a full list of banks is at the end of the article).
In the current economic situation, many companies urgently need capital to maintain liquidity and pay their obligations, including employees’ wages.
Applications for financingin the form of partly non-repayable subsidies may be submitted by representatives of businesses that are customers of a participating bank. Applications are based on entrepreneurs’ declarations, automatically checked by PFR against bank data (identification, including NIP number), ZUS data (employment) and Ministry of Finance data (including the previous financial year’s sales revenue for SMEs). Once the information is confirmed, the subsidy amount will be calculated.
If the available data result in a lower award than the entrepreneur applied for, the Fund will inform them of its reasons through the bank. In that case the subsidy will be paid in the lower amount set by PFR, and the entrepreneur will be able to appeal. The appeal option will be available in banking systems from 11 May.
The entire process, including receiving the decision, signing the agreement with PFR and appealing the Fund’s decision, will take place online in the bank’s transaction system. Companies that apply for or receive a PFR Financial Shield subsidy incur no costs, such as bank commissions or application-processing fees.
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What do you need to apply?
To complete the application efficiently, prepare data such as the number of employees (including people under civil-law contracts) expressed as full-time equivalents and monthly revenue figures. These allow the business to be classified as a micro, small or medium-sized enterprise and the subsidy due to be calculated.
Because public registers will be used to check the applications and declarations that affect eligibility and the amount awarded, an entrepreneur seeking support should file a VAT return in time for the Ministry of Finance to process and approve it. Before starting the application, it is also worth reading the PFR website, which describes the Financial Shield rules in detail, as well as your bank’s website.
Fast and secure applications and distribution of funds will be possible thanks to the National Clearing House, which created a modern system for automatically exchanging information between banks and PFR. Participating banks also did a great deal of work without which the Financial Shield could not have been launched. This is another example of successful cooperation between the banking sector and public institutions.
Who is the PFR Financial Shield for?
The PFR programme is intended for:
- microbusinesses employing 1 to 9 people (excluding the owner) as at 31 December 2019, with annual turnover or total assets not exceeding EUR 2 million;
- small and medium-sized businesses employing up to 249 people, with annual turnover not exceeding EUR 50 million or total assets not exceeding EUR 43 million.
Subsidies will be available to companies whose revenue fell by at least 25% in any month after 1 February of this year compared with the previous month or the corresponding month of the preceding year because of COVID-19.
The maximum subsidy for microbusinesses depends on the decline in revenue and employee count and may reach PLN 324,000 (PLN 70,000–90,000 on average); 75% of its value may be non-repayable. A quarter is non-repayable if the company continues operating for 12 months after the award. Another 50% may be non-repayable depending on whether average employment is maintained over 12 months. If employment falls, the proportion of the subsidy the entrepreneur must repay rises accordingly, giving beneficiaries a strong incentive to retain jobs. Repayment of the remainder begins after 12 months in instalments over 24 months.
For SMEs, the subsidy is 4%, 6% or 8% of annual sales, depending on the fall in sales, and may reach a maximum of PLN 3.5 million (PLN 1.9 million on average). As much as 75% of the financial subsidy may be non-repayable: 25% if operations continue, 25% depending on the company’s loss on sales and a further 25% depending on maintaining average employment for 12 months. The entrepreneur must repay proportionately more if employment falls.
Total support for microbusinesses is PLN 25 billion, including approximately PLN 16 billion expected to be non-repayable. The maximum programme value for SMEs is PLN 50 billion, including up to PLN 32 billion expected to be non-repayable.
For large companies employing at least 250 people (total employment in the corporate group) and with consolidated turnover exceeding EUR 50 million or total assets exceeding EUR 43 million, the PFR Financial Shield provides liquidity financing, preferential loans or equity instruments on terms agreed individually with PFR. Large-company applications can be submitted directly through the PFR website.
Smaller companies may also use this financing route if they employ more than 150 people and have turnover exceeding PLN 100 million, where their projected financing gap exceeds PLN 3.5 million or the financing relates to the COVID-19 Sector Programme.
To obtain PFR Financial Shield support, the company must have been operating on 31 December 2019 and must not be in arrears with tax or social-insurance contributions.
Micro, small and medium-sized businesses may submit PFR Financial Shield applications only through the following banks:
- Alior Bank
- Bank BPS and its affiliated and cooperating cooperative banks
- Bank Millennium
- Bank Pekao S.A.
- Bank Pocztowy
- BNP Paribas
- BOŚ Bank
- Citi Handlowy
- Credit Agricole
- Getin Noble Bank
- Idea Bank
- ING Bank Śląski
- mBank
- Nest Bank
- PKO Bank Polski
- Santander Bank Polska
- SGB-Bank S.A. and SGB cooperative banks and cooperating cooperative banks
Launch dates at the remaining banks can be checked on the PFR website (https://pfrsa.pl/tarcza-finansowa-pfr/tarcza-finansowa-pfr-dla-mmsp.html)
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