Subsidised finance: returning to normality

Subsidised finance and the public support for economic activities has decidedly been one of the great protagonists of the emergency linked to the pandemic. Becoming crucial instruments for supporting our entrepreneurial fabric, they took shape through several measures, including strengthening the system of public guarantees issued for loans made by banks.

The beneficiaries fo that support, aimed at facilitating access to credit, were mainly Small and Medium Sized Enterprises and the Mid Cap, but Large Enterprises also benefited, especially through creation of the new Garanzia Italia managed by SACE.

Over the period the regulation evolved in several ways. Here we will be concentrating on some of the more recent novelties introduced by the so-called “Sostegni Bis” Decree (art. 13 of Italian Legislative Decree no. 73 of 25 May 2021 ), foreseeing new opportunities, but also representing a first step towards a much-hoped-for return to normal.

The Sostegni bis Decree: what we need to know?

The first novelty is a further extension to the period of moratorium of existing loans for the SMEs: from 30 June to 31 December 2021. This new moratorium only concerns the principal (companies still have to pay the interest

Another important novelty has concerned the Mid Cap which can now only apply to SACE for their guarantee request and no longer to the Guarantee Fund. SACE has established a double track for these companies, which can apply for the guarantee free of charge – within a ceiling of 5 million euros, also counting on any guarantees granted by the Guarantee Fund – or pay for it (like the SMEs that have used up that ceiling ).

An interesting opportunity concerns the rise in the maximum duration of loans granted related to the Covid-19 emergency, for both the Guarantee Fund and SACE, from 6 to 8 years (new limit authorised by the European Commission). That novelty does not just affect new loans, as it is possible to apply for an extension on loans already granted. However they have established a reduction – only for the new loans – of the maximum guarantee possible which drops from 90% to 80% (a reduction that does not affect the onerous SACE guarantees).

Lastly, let’s move on to loans for the SMEs of up to 30 thousand euros. State coverage has been reduced from 100% to 90% on those loans. On the other hand, to cover the assumption of risk, the constraint on the maximum interest applicable by the Bank has been removed.

The measures mentioned are the umpteenth step on a path between the public support and banking worlds, which has enabled giving companies the liquidity they needed to handle the 2020 instability, which in some cases has also extended to this 2021. We do hope that the changes made ferry our Country’s entire entrepreneurial fabric towards a progressive return to normality, as has already happened for all those companies that have seen a recovery in orders and productivity.

by
Andrea Dominici, Head of Subsidised Finance

Degree in Economics and Commerce, former Tax Police Officer, I have been working in the Subsidised Finance sector in Banks since 1996.
Head of the Subsidised Finance Office since 2010, first with GE Capital Interbanca and now in Banca Ifis.
Member of the Workgroups and Committees in the specific Subsidised Finance sector in ABI, ASSILEA and MISE.

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