Subsidized loans for businesses: how to access microcredit.

In particular, when it comes to nascent companies and whose development is determined by an evolving economic capacity, access to credit becomes an essential element for the continuation of entrepreneurial activities but, where there is no guarantee of proposing to banks in exchange for the loans requested (see also Immediate online loans), here is no possibility of starting up and developing a business: this is the primary reason why many small and medium-sized national companies have closed their doors in the bud.

Issues regarding guarantees

Issues regarding guarantees

After a careful analysis started by the Ministry of Economic Development (MISE), regarding the issue of guarantees for microcredit dedicated to SMEs, between 2014 and 2015 it was decided to integrate the reference Law, the 662/96 which regulates the ‘art. 2 paragraph 100 letter a, access to public guarantee funds for companies, some simplifications, which we find within the Consolidated Banking Act (TUB) and the Decree of the Ministry of Economy and Finance n.176 of 17 / 10/2014, in addition to a further revision carried out in March 2015.

In this way, we want to simplify the application process to access the funds destined not so much for business financing, but for placing a guarantee – for the banks providing the loans – consisting of a public fund, generated for part by financing which come from the Ministry for Economic Development – for the current year it is 30 million USD – and for the remaining part, from funds paid voluntarily by citizens, organizations, associations and companies.

Companies that do not possess any type of guarantee that can be offered to access bank loans (see also bank credit), therefore take advantage of this fund, which acts as guarantor for the sums that are paid by banking institutions.

But what are the requirements to be admitted to the guarantee fund for microcredit, also confirmed for 2015? Let’s see them together.

The companies that submitted an application must be set up for no more than 5 years. The same applies to freelancers, whose VAT number at the time of the request to take advantage of the guarantee fund, must not have been opened for more than five years.

Another criterion is the number of employees: both in the case of companies and professionals, they must not exceed 5 units. Number rising to 10, only if the applicants are simplified partnerships, cooperatives or limited liability companies.

Capital Requirements

Capital Requirements

As regards the balance sheet, the criteria are as follows:

  • Asset assets not exceeding 300,000 USD
  • Gross revenues up to $ 200,000
  • Debt level up to $ 100,000

Lastly, only as far as professionals are concerned, they must be enrolled in the various national professional orders or, in the absence of registration with the order, membership of the professional associations registered in the specific list of the Ministry for Economic Development is required.

Duration and amounts

Duration and amounts

As regards the duration of the guarantee, the limit is set at 7 years and the maximum amount is $ 25,000, except in cases where the loan is paid through the installment payment: in this case, the maximum amount of the guarantee, is set at 35,000 USD.

Who to apply for admission to the guarantee fund? To banking institutions, financial intermediaries or confidi – collective credit guarantee consortium – who will carry out the request process on behalf of companies and professionals in possession of the above characteristics.

According to data from a study carried out by the Ministry of Economic Development, to date over 99% of companies and professionals who have applied for access to the guarantee fund for microcredit, have obtained access to credit despite not having any type of real guarantee to be proposed to the banking institution. A success, not to be underestimated.

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