SMEs can secure cheap credit
HDB to slash interest rates and facilitate the process of application submission and approval
As of Thursday all small and medium-sized businesses have access to up to 75% cheaper loans compared to the average interest rate applying today, which is between 7% and 9%, through the three new funds launched by the Hellenic Development Bank (HDB), becoming available by all commercial banks.
The easing of borrowing costs for businesses through the three new programs results from the co-financing of the loan by 40% from state funds, while for the remaining 60% that will be financed by the bank the cost of financing will be reduced by 3% for the first two years of the loan with the application of the partial interest rate subsidy. According to estimates, the subsidy will result in a total reduction in borrowing costs that can exceed 75% in some cases.
Besides the subsidy, the facilitation of businesses in terms of the application submission process is also significant, as it will be done electronically on a special platform designed by the HDB. The first evaluation will also be done in an automatic way, concerning the checking of companies against their debts to the state (tax and social security), as well as to the banks through the Teiresias register.
The approval process is promoted through the “Know Your Customer” tool implemented by the HDB, through which businesses can “introduce themselves” to banks by applying for financing. The platform examines the eligibility of interested businesses, checking their tax and social security compliance as well as their financial behavior in Teiresias, which will be done electronically through the platform upon submission of the application.
Having secured the initial approval of their loan request based on the data of their financial behavior, businesses will choose the bank or banks to which they will address the financing request in order to receive a financial offer.
In total, the resources of the three programs amount to 1.35 billion euros, while additional resources of €35 million will cover the interest subsidy for the loans provided.