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

Law Decree 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 – concerning, inter alia, measures to support the liquidity of companies, has ordered an enhancement of the Guarantee Fund (Law no. 662/96) through the allocation of a further 1,829 million euros for the year 2020 for the purposes referred to in the Decree, and the expansion of its operations with various provisions, which will be valid until 31 December 2020.

The main changes concern: use of the guarantee free of charge, the increase in 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.

Recipients

Micro, small and medium-sized enterprises (SMEs) 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. Enterprises in these sectors are not eligible:

  • agriculture, forestry and fishing activities;
  • financial and insurance activities;
  • public administration and defence;
  • activities of households;
  • organisations and bodies outside the national borders.

Main news on the operations of the Guarantee Fund already in force

Law Decree no. 23 of 8 April 2020 (Liquidity Decree) – as converted by Law no. 40 of 5 June 2020, published in Official Gazette no. 143 of 6 June 2020, introduced the following main changes relating to the operations of the Guarantee Fund, which will remain in force until 31 December 2020:

  • Free Guarantee;
  • Maximum guaranteed amount per company raised to 5 million Euro;
  • Extension of the guarantee of the Fund to companies with a number of employees not exceeding 499 (Mid Caps);
  • 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 than, alternatively to:
    • 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 the duration and amount of which are not as above, 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 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 of the fulfilment of the requirements, without waiting for the final outcome of the investigation by the fund manager.

Companies that have already obtained financing pursuant to art. 13, para. 1, letter m) of the Pre-conversion Liquidity Decree (which indicated a limit of a maximum amount of 25,000 Euro and a maximum duration of 72 months), may request, pursuant to art. 13, para. 1, letter m-bis) of the Liquidity Decree as converted, with regard to the amount financed and the duration, the adjustment of the loan to the new conditions introduced by the Liquidity Decree conversion law, described above.

  • Eligibility of the Fund’s direct guarantee of 80% also for loans for the renegotiation of an enterprise’s debt, on condition that the new loans provide for the disbursement of additional credit to the enterprise at least equal to 25% of the amount of the outstanding debt of the loan subject to renegotiation (the additional credit is equal to 10% for renegotiation transactions whose application for admission to the Guarantee was submitted by 18 June 2020 and which were approved by the Bank by that date, as required by Circular No. 13/2020 issued on 17 June 2020 by the Guarantee Fund, while it is equal to 25% for renegotiation operations whose request for admission to the guarantee has been submitted from 19 June 2020). 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 granting of the guarantee;
  • The fee for not finalising the financial transactions is not due;
  • Repeal of the limitations to the operations of the direct guarantee existing in some Regions (Tuscany, Friuli Venezia Giulia, Marche, Abruzzo).

For further information on all updates of the operations of the Guarantee Fund introduced by art. 13 of the Law Decree no. 23 of 8 April 2020 (Liquidity Decree) – as converted by Law no. 40 of 5 June 2020, published in Official Gazette no. 143 of 6 June 2020 – please refer to the Law itself.

 

 

In light of the changes introduced by the Liquidity Decree on the operations of the Guarantee Fund in force until 31 December 2020, Banca Ifis proposes the following finance transactions supported by the guarantee of the Guarantee Fund.

Guaranteed mortgages with the guarantee fund

SMEs and Mid Caps

  • 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 with a maximum duration of 72 months and for certain limits on the amount (pursuant to the Liquidity Decree art. 13 para. 1 letter c); 80% in all other cases and for loans aimed at renegotiating existing loans (pursuant to art. 13, para. 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 to renegotiate existing loans with Banca Ifis SpA [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 if carried out pursuant to art. 13, para. 1, letter e) of the Liquidity Decree]

SMEs whose business activity has been damaged by the COVID-19 emergency (pursuant to art. 13 para. 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 120 months;
  • grace period of 24 months;
  • discounted fixed interest rate.

Companies that have already obtained financing pursuant to art. 13, para. 1, letter m) of the Pre-conversion Liquidity Decree (which indicated a limit of a maximum amount of 25,000 Euro and a maximum duration of 72 months), may request, pursuant to art. 13, para. 1, letter m-bis) of the Liquidity Decree as converted, with regard to the amount financed and the duration, the adjustment of the loan to the new conditions introduced by the Liquidity Decree conversion law, described above.

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 2020.

These conditions partially derogate from the provisions of 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 in force until 31 December 2020.

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 leasing 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 leasing;
  • duration up to a maximum of 72 months;
  • purposes: investment in the business activity or renegotiation of financial leasing transactions with Banca Ifis SpA [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 if carried out pursuant to art. 13, para. 1, letter e) of the Liquidity Decree as converted into law]; in this case the guarantee of the Fund is equal to 80% of the amount of the new loan;
  • type of financed assets: 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) in force until 31 December 2020.

To access the Guarantee Fund it is necessary to send a specific application to the leasing company on a certain date (form Annex 4). The application form must be signed by the company’s legal representative and completed in its entirety.

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