While many companies have been hit hard by the coronary crisis, others have benefited and some have expanded. Focused on selling meat and meat products, FarmHouse has expanded the number of its stores last year, opened a street food stall, and is currently preparing to launch its own restaurant. Thanks to the new projects, she also did not have to lay off workers, but rather increased the number of employees. According to FarmHouse owner Marián Petrík, the success story is a puzzle made up of several parts. “However, the important loan was also an important part of it,” Petrick said.
Entrepreneurs have had little choice since the start of the coronary crisis. The first option was to fight private finances against the unfavorable financial situation caused by the epidemic measures. However, business should not revolve around running out of iron stocks. The alternative was to use one of the available forms of assistance.
In previous waves of the epidemic, there was great interest in loans secured by state guarantees, the so-called anti-crown guarantee. However, their offer is currently very limited.
A suitable event is loans guaranteed by the European EGF, which entrepreneurs can still take care of. What exactly is it about?
Especially for small and medium enterprises
The European Guarantee Fund EGF was set up by the European Investment Bank Group with contributions from EU member states to protect businesses affected by the crisis caused by COVID-19. With nearly €25 billion in collateral, it allows loans, guarantees, asset-backed securities, stocks and other financial instruments to be quickly made available. Especially for small and medium enterprises.
The fact that the fund helps the most vulnerable people is also confirmed by practice. According to Katerina Gasparovska, Director of Financial Solutions for Slovenská sporiteľňa Companies, loans secured by EGF are currently offered by the Bank to the above-mentioned SMEs.
They can then use the money as investments in tangible or intangible assets, to fund working capital or liquidity needs or to refinance current liabilities.
The attention of hundreds of businessmen
According to Gašparovská, providing a guarantee by the EGF facilitates access to investment and operating loans for entrepreneurs, and will also result in a lower interest rate compared to a regular loan. Low security requirements are also an advantage. The Bank does not require a credit guarantee from smaller clients with a turnover of up to 1 million euros. “The advantage is the possibility of maturity up to 15 years,” Gasparovska added.
Source: Marián Petrík, FarmHouse
The EGF-secured loan has been used by FarmHouse as well. So as to aggregate its four new operations.
“We thought about expansion for a long time, but when the coronary crisis happened, we thought about whether we should wait for the situation to calm down. In the end, we decided to go ahead with it now. Fortunately, it turned out that thanks to a reasonable investment in new operations, we did not lose employees , but we were able to hire new employees,” says Petrick, who sees the main idea of the loan being to keep jobs.
According to Gasparovska, the benefits of loans backed by the European Globalization Adjustment Fund have also been reflected in the high demand since the beginning of their provision. “Since July 2021, we have helped more than a hundred micro-entrepreneurs and small business owners who are most interested in this product. Currently, there is a growing interest in financing companies dealing with rising prices for their inputs to production, or doing business in endangered sectors with the current wave of epidemic”, explains the director of financial solutions at Slovenská sporiteľňa.
It’s not just a crisis package
However, Slovenská sporiteľňa also offers small and medium-sized businesses other interesting solutions to financial issues. And not just those who need to protect themselves from the pandemic. They can also get useful resources for innovative investment projects. The advantage is lower loan insurance requirements as well as lower interest rate. It is a support for operational program research and innovation, which is co-financed by European Structural and Investment Funds.
For example, for the famous manufacturer and seller of barefoot shoes Be Lenka, a loan was not a necessity, but an opportunity to move forward, make some changes or introduce some innovation at a faster and earlier pace.
They used the funds to prepare three new brands that will appear on the market early next year. “The funding has helped us with our new front-end IT or online store solution. It also covers marketing costs for campaign performance and PR activities, which are important in launching new brands and also producing first orders prior to launch,” describes Be Lenka owner, Juraj Fehervari .
Source: Juraj Fehervari, Be Linka
The company’s finances also bolstered the growing inventory, which is important to maintain the purchasing turnover. Thanks to the loan, they were also able to gain a foothold in the German market, where marketing costs are much higher. The owner of the company concludes that “at the same time, with these investments, we have increased the income of Be Lenka to such an extent that we have been able to repay all the borrowed resources.”
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