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, – also concerning measures to support liquidity in businesses, ordered a strengthening of the Guarantee Fund (Law no. 662/96) and the expansion of the relative operations with several provisions, valid until 31 December 2020.

The main novelties concern: use of the guarantee free of charge, the increase of the maximum guaranteed amount for each company, the extension of the eligibility of the guarantee to Mid Caps, the increase in the percentage of direct guarantee to 80% regardless of the rating bands and terms of loans, with the possibility of direct coverage of up to 100% for some financial transactions with specific characteristics and for some types of beneficiaries.

Law no 178 of 30 December 2020 (Budget Law 2021) extended the measures set forth in the Liquidity Decree until 30 June 2021, except for the guarantees issued to companies with a number of employees of no lower than 250 and no higher than 499, for which the extension is granted until 28 February 2021.

Recipients

Micro, small and medium-sized enterprises and, following the Liquidity Decree, companies with a number of employees not exceeding 499 (Mid Caps) registered in the Register of Companies, belonging to different production sectors and headquartered in Italy. Companies with a number of employees no lower than 250 and not exceeding 499 will be eligible for the Guarantee Fund until 28 February 2021. 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

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, – introduced the following main novelties related to the Guarantee Fund operations, to remain in force, following the extension established by Budget Law 2021, until 30 June 2021:

  • Free Guarantee;
  • Maximum guaranteed amount per company raised to 5 million Euro;
  • Extension of the Fund guarantee to companies with a number of employees not exceeding 499 (Mid Caps). Companies with a number of employees no lower than 250 and not exceeding 499 will be eligible for the Guarantee Fund until 28 February 2021;
  • Raising the direct guarantee to 90% for loans with a maximum duration of 72 months. This level of guarantee is recognised for a total amount of financing not higher, alternatively than:
    • 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, or 12 months for Mid Caps (requirement to be certified with self-certification pursuant to Presidential Decree 445/2000).

For financial transactions that do not have the above-indicated duration and amount, the direct guarantee is raised to 80%;

  • Coverage of the direct guarantee of 100% 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, following the amendment introduced by the Budget Law 2021 (the maximum duration foreseen by the Liquidity Decree, following conversion into law, was 120 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 balance sheet 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;
    • Discounted interest rate.

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.

Budget Law 2021 extended those loans to companies with the following ATECO 2007 codes:

  • 19.20 Financial adviser and mediation activities
  • 19.21 Financial Advisers
  • 19.22 Agents, mediators and purveyors of financial products
  • 21.00 Independent insurance experts and liquidators

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 of the direct Fund guarantee, for 80%, also for loans needed to renegotiate the Company debt, as long as the new loans establish allocation to the Company of additional credit equal to 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 5June 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 Official Gazette no. 322 of 30 December 2020

please consult 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 until 30 June 2021, Banca Ifis proposes the following loan transactions supported by the guarantee of the Guarantee Fund.

Mortgages guaranteed by the guarantee fund

Companies (up to 30 June 2020) and Mid Caps (for companies with a number of employees no lower than 250 and not exceeding 499 until 28 February 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: 90% for loans lasting maximum 72 months and for certain amount limits (pursuant to the Liquidity Decree 13 par. 1 letter c); 80% in all other cases and for loans aimed at renegotiating existing loans (pursuant to art. 13, par. 1, letter e) of the Liquidity Decree);
  • 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 art. 13, par. 1, letter e) of the Liquidity Decree]

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 loan equal to 25% of the beneficiary’s total turnover or double the wage bill, resulting from the last balance sheet 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:100%;
  • maximum duration 180 months;
  • grace period of 24 months;
  • discounted fixed interest rate.

The companies obtaining those loans, pursuant to art. 13, par. 1, letter m) of the Liquidity Decree as converted (that indicated a maximum duration of 120 months) can apply for, pursuant to art. 1, par. 217, of the Budget Law 2021, 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 24 working days

For all types of guaranteed mortgage, the guarantee fees and the fee for not finalising the financial transactions will not be applied by the Guarantee Fund until 30 December 2021.

 

These conditions partially derogate from the provisions in the Information Sheet on Guaranteed Mortgages, Puglia Sviluppo Guaranteed Mortgages and Guaranteed Mortgages with EIB Funding following the provisions introduced by art. 13 of the Liquidity Decree, extended by Budget Law 2021 until 30 June 2021.

Corporate customers who would like to find out more or request further information should contact the Manager of their local branch; other customers should contact their local branch or call the Direct Line at 800 712 433.

Guaranteed leases with the guarantee fund

  • Maximum amount of the loan of € 5 million;
  • maximum amount guaranteed by the Guarantee Fund equal to 90% of the amount financed in financial lease;
  • duration up to a maximum of 72 months;
  • purposes: investment in the business activity or renegotiation of financial lease transactions with Banca Ifis S.p.A. [loans for renegotiation purposes provide for allocation of additional credit equal to at least 25% of the outstanding debt of the loan(s) being renegotiated if performed pursuant to art.13, par.1 letter e) of the Liquidity Decree as converted in law); in this case the Fund guarantee is equal to 80% of the new loan amount;
  • 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;
    – administrative management costs of € 1,000.00.

 

These conditions partially derogate from the provisions of the Information Sheet on Vehicle Leasing and Equipment Leasing following the provisions introduced by art. 13 of the Liquidity Decree (as converted into law) extended by Budget Law 2021 until 30 June 2021.

To access the Guarantee Fund please send a specific application with certain date to the leasing company (form Annex 4). 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.