The Guarantee Fund

The Guarantee Fund (Law 662/96) is a public guarantee created by the Ministry of Economic Development (MISE), the purpose of which is to facilitate access to credit for businesses, replacing or accompanying guarantees of another nature and reducing the risk of the financing party on the guaranteed amount.

Expansion of the operations of the Guarantee Fund

Decree Law no.23 of 8 April 2020  (Liquidity Decree) – as converted by Law no. 40 of 5 June 2020, published in the Official Gazette no. 143 of 6 June 2020, as amended by Law no. 178 of 30 December 2020 (2021 Budget Law) and by Decree Law no. 73 of 25 May 2021  (“Sostegni-bis” Decree)  – also concerning measures to support liquidity in businesses, ordered a strengthening of the Guarantee Fund (Law no.662/96) and expansion of the relative operations with several provisions, valid until 31 December 2021.

The main novelties concern: use of the guarantee free of charge, the increase of the maximum guaranteed amount for each company, the increase in the percentage of direct guarantee to 80% regardless of the rating  bands and loan duration, with the possibility of direct coverage of up to 90% for some financial transactions with specific characteristics and for some types of beneficiaries.

Recipients

Micro, small and medium-sized enterprises registered with the Register of Companies belonging to different production sectors with registered office in Italy. Enterprises in these sectors are not eligible:

  • Financial and insurance activities;
  • Public administration and defence;
  • Activities of households;
  • Organisations and bodies outside the national borders.

Principal novelties

The Liquidity Decree, as last amended by the Sostegni bis Decree – introduced the following main novelties related to Guarantee Fund transactions, to remain in force until 31 December 2021:

  • Free Guarantee;
  • Maximum guaranteed amount per company raised to 5 million Euro;
  • Raising the direct guarantee to 80% for all loans regardless of the rating bands and loan durations;
  • For loan applications pursuant to Point 3.2 of the temporary Framework for State aid measures to support the Economy in the current Covid-19 emergency (temporary Framework) the maximum duration foreseen is 96 months for a total loan amount per single company not exceeding alternatively :
    • Double the annual salary expenditure of the beneficiary company for 2019 or the last year available (in the case of companies set up from 1 January 2019, the maximum loan amount cannot exceed the annual salary costs expected for the first two years of activity);
    • 25% of the beneficiary’s total turnover in 2019; for companies characterised by ultra-annual production cycles (joint-stock companies in the real estate and construction sectors), reference is made to the revenues from sales and services added to the changes in inventories of unfinished, semi-finished and finished products;
    • Requirements for working capital or for investments in the following 18 months for SMEs (requirement to be certified with self-certification pursuant to Presidential Decree 445/2000);
    • For loans granted in accordance with the temporary Framework with duration no longer than 72 months and already guaranteed by the Fund, with an extension to the transaction duration granted by the Bank, as established in the Sostegni bis Decree, SMEs and companies with no more than 499 employees (Mid Cap) may request a guarantee extension to 96 months; without prejudice to the aforementioned maximum period of 96 month transaction duration.

 

  • Coverage of the direct guarantee of 90% for new loans to SMEs and natural persons carrying out business, arts and professional activities, whose business activity has been damaged by the COVID-19 emergency (to be certified with self-certification pursuant to Presidential Decree 445/2000) on condition that the loans provide for:
    • Minimum grace period of 24 months; maximum duration 180 months;
    • Amount not exceeding 25% of the beneficiary’s total turnover or double the wage bill (for companies set up as of 1 January 2019, at the annual wage costs expected for the first two years of activity), resulting from the last financial statements filed, or from the last tax return presented, or by self-certification pursuant to Presidential Decree 445/2000 or other suitable documentation, and in any case not exceeding € 30,000.

For these loans, the intervention of the Guarantee Fund is granted automatically, free of charge and without evaluation. The Bank can disburse the loan guaranteed by the Fund, subject to formal verification that requirements are fulfilled, without waiting for the final outcome of the investigation by the Fund manager.

The companies obtaining these loans, pursuant to art.  13, par. 1, letter m) of the Liquidity Decree  as converted (indicating a maximum limit of 120 months) may apply, pursuant to art. 1 paragraph 217 of Budget Law 2021, for an extension of duration to maximum 180 months, merely adjusting the interest rate applied, related to the longer loan duration.

  • Eligibility for the direct guarantee of the Fund to the extent of 80% also for loans for company debt renegotiation transactions. If the new loan should be applied for pursuant to Point 3.2 of the temporary Framework or should concern renegotiation of loans granted by the Bank that are not already guaranteed, the new loan must foresee allocation to the Company of additional credit to the extent of at least 25% of the existing debt amount granted for the loan being renegotiated. In such cases, the Bank must send the Guarantee Fund a declaration certifying the reduction in the interest rate applied on the guaranteed loan, as a result of the guarantee being granted;
  • No fee is due for not finalising the financial transactions;
  • Repeal of the limits to the operations of the direct guarantee existing in some Regions (Tuscany, Friuli Venezia Giulia, Marche, Abruzzo).

 

For further analysis of all novelties to Guarantee Fund operations introduced:

  • By art. 13 of Decree Law no. 23 of 8 April 2020 (Liquidity Decree) – as converted by Law no. 40 of 5 June 2020, , published in the Official Gazette no. 143 of 6 June 2020 ;
  • By art. 1 paragraphs 244 and 245, 213-218 of Law no. 178 of 30 December 2020 , published in the Official Gazette no. 322 of 30 December 2020 ;
  • By art. 13 of the Sostegni bis Decree

please refer to the Laws themselves.

In light of the changes introduced by the Liquidity Decree on the operations of the Guarantee Fund, as extended by Budget Law 2021 and by the Sostegni-bis Decree until 31 June 2021, Banca Ifis proposes the following loan transactions backed by the Guarantee Fund guarantee.

Mortgages guaranteed by the guarantee fund

SMEs (until 31 December 2021)

  • Amount to be determined according to corporate needs, subject to the Bank’s assessment and the maximum amount of loans guaranteed by the Guarantee Fund for each company, equal to € 5,000,000;
  • Amount guaranteed by the Guarantee Fund: 80%;
  • Maximum duration 96 months;
  • Grace period up to 24 months;
  • Purposes in support of the business activity for liquidity needs (e.g. payment of suppliers, staff, purchase of stocks, financial repositioning), to carry out investment programmes or renegotiate existing loans [loans for renegotiation purposes provide for the disbursement of additional credit equal to at least 25% of the amount of the outstanding debt of the loan(s) being renegotiated and reduction of the interest rate applied, if carried out pursuant to Point 3.2 of the temporary Framework, or concern renegotiation of loans granted by the Bank not already guaranteed)

SMEs whose business activity has been damaged by the COVID-19 emergency (pursuant to art. 13 par. 1 letter m) of the Liquidity Decree)

  • Maximum amount of the loan equal to 25% of the beneficiary’s total turnover or double the wage bill resulting from the last financial statements filed, or from the last tax return presented (for companies set up as of 1 January 2019 at the annual wage costs foreseen in the first two years of activity), and in any case not exceeding € 30,000;
  • amount guaranteed by the Guarantee Fund:90% since 1 July 2021;
  • maximum duration 180 months;
  • grace period of 24 months.

The companies that have already obtained these loans, pursuant to art.  13, par. 1, letter m) of the Liquidity Decree  as converted (indicating a maximum limit of 120 months) may apply, pursuant to art. 1 par. 217, of the Budget Law 2021, for an extension of duration to maximum 180 months, merely adjusting the interest rate applied, related to the longer loan duration.

Average response time

The average time taken by the Bank to grant loans pursuant to art.13, par. 1 letter m) of the Liquidity Decree is 17 working days

 

 

For all types of guaranteed mortgage, the guarantee fees and the fee for not finalising the financial transactions, when applicable, will not be applied by the Guarantee Fund until 31 December 2021.

These conditions partially derogate from provisions in the Information Sheet on Guaranteed Mortgages, Puglia Sviluppo Guaranteed Mortgages and Mortgages Guaranteed with EIB funding following the provisions introduced by art. 13 of the Liquidity Decree, extended by Budget Law 2021 and by the Sostegni-bis Decree until 31 December 2021.

Corporate customers wanting to learn more or request further information should contact their branch Manager; Non customers should contact the Local Branch or call the Direct Line on 800 712 433.

Guaranteed leases with the guarantee fund

  • Maximum amount of the loan of Euro 5 million;
  • Maximum amount guaranteed by the Guarantee Fund equal to 80% of the amount financed in financial lease from 1 July 2021;
  • duration up to a maximum of 72 months;
  • Purpose: investment for business activities;
  • Types of asset financed: capital goods, semi-trailers, trailers, industrial vehicles;
  • Deadline of 9 months for delivery of the asset/signing of the delivery report (instead of 6 months), which produces the effects of the date for granting the loan;
  • Non-application of the underlying standard costs envisaged by the Bank for operations guaranteed by the Guarantee Fund:
    – Fee of € 300.00 for not finalising/waiving the guaranteed transaction;
    – One-off fee ranging from a minimum of 0.25% to a maximum of 1% of the guaranteed amount;
  • Reduction of the administrative management fees to 500 euro.

These conditions partially derogate from the provisions in the Information Sheet on Vehicle Leases and Equipment Leases following provisions introduced by art. 13 of the Liquidity Decree (as converted in law) extended by Budget Law 2021 and the Sostegni-bis Decree until 31 December 2021.

To access the Guarantee Fund the  lease company needs to be sent with firm date a  specific application by using the application form  (form Annex 4) published by the Ministry for Economic Development at the following link https://www.fondidigaranzia.it/normativa-e-modulistica/modulistica/. The application form must be signed by the legal representative of the company and be completed in full.

For further information, contact your local branch or call the Direct Line at 800 555 078.