Simply put, a de minimis guarantee is a kind of security for working capital or investment loan in the event that the trader fails to settle the liability within the time limit that was previously specified in the loan agreement. Thanks to this, the bank can be sure that the borrower will repay the financial commitment.
What is a de minimis guarantee?
De minimis guarantees have been implemented primarily to improve the financing of operations and the development of micro, small and medium-sized enterprises. In the case of this financial instrument, Bank acts as a guarantor. This means that in the event of problems with the loan repayment by the entrepreneur, BFF will take responsibility for it.
At this point, it should be emphasized that such a guarantee is collateral of up to USD 3.5 million or around 60 percent. commitments for a maximum period of 27 months – there is a chance to extend this period up to 99 months, but only in the case of an investment loan. It is also worth remembering that using this solution involves a preferential fee – 0.5% of the amount of the guarantee per annum.
Loan offers with a de minimis guarantee – in which banks can we find them?
There are many offers with de minimis guarantee on our market. Where can we get them? On the website of BFF, which is commissioned by the state to handle these guarantees, we find information that loans with such collateral can currently be granted by 18 banks.
The de minimis guarantee is a form of securing the debt and if we think that this solution will be good for the further development of the enterprise, we should think about using it. You will find all the information about the process of applying for a loan with such a guarantee and the requirements for the bank in the next paragraphs of our article. Read!
A loan with de minimis guarantee – conditions
Every entrepreneur should be aware that before he can get a loan with a de minimis guarantee, he must first meet several conditions. The basic requirement to be followed is creditworthiness because it will be the basis for the decision to provide the company with additional money. What else do you need to follow?
Some banks require a minimum 12-month period for a loan backed by a de minimis guarantee, while in other institutions it is even 24 months. Beginner entrepreneurs should not worry about this, however, as there are also many offers tailored to new business activities on the market.
One should know that such financing options will not be available to companies that have already exhausted the de minimis limit (EUR 200,000 in the previous three years) for various subsidies, concessions or tax exemptions. Therefore, before applying for additional money from BFF, you must first make sure that you have not violated this limit.
What is the procedure for applying for a loan with a de minimis guarantee?
The process of obtaining a loan with a de minimis guarantee is basically the same as the one used for a regular cash loan. An extremely important issue in the context of this procedure is that the borrower will not have to provide any formalities to BFF, it is enough for us to present the necessary documents to the bank of our choice.
Applying for this type of financial commitment is really simple and doesn’t require a lot of time. How is it going First, two applications should be submitted to the bank: the first should apply only to the loan, while the second should be for the de minimis guarantee. In addition, the following documents should also be forwarded to the institution:
- company registration documents (e.g. printout from the Central Register and Information on Economic Activity and certificate of assigning REGON number, NIP),
- financial documents (for a specified period of the company’s operation),
- certificate of non-payment in respect of the tax office and the Social Insurance Institution,
- document informing about public aid received or not received,
- promissory note with a promissory note declaration,
- certificate of submission to enforcement,
- data protection declaration (after obtaining the guarantee).
It is also often the case that banks, before granting a loan, additionally ask entrepreneurs to submit an asset declaration, tax declaration for the last full financial year or forecast financial results during the loan repayment period. In some cases, it is also required to provide additional security for financial liability.
De minimis guarantee – advantages and disadvantages
Before deciding to take out a loan with a de minimis guarantee for the development of your business, we should first carefully analyze all its positive and negative sides. Below we have indicated the most important advantages and disadvantages of this financial solution, thanks to which we will find out if it is intended for us, get acquainted!
- a loan with a de minimis guarantee is available to entrepreneurs with a short credit history,
- customers who do not have sufficient assets to secure the loan can use this solution,
- the process of applying for such a loan is really simple, all matters related to obtaining it can be dealt with at the crediting bank without having to inform other institutions,
- depending on the bank, additional money can be on your company’s account even within 24 hours,
- no fee for processing the application for a de minimis guarantee,
- reducing the total cost of credit, e.g. by adopting a lower margin or commission.
- entrepreneurs who have obtained a loan secured by a de minimis guarantee cannot allocate it for capital investments, purchase of financial instruments, debts or an organized part of the enterprise.