CEC Bank and the Investment and Development Bank (BID) have revised their portfolio guarantee convention for small and medium-sized enterprises (SMEs), expanding the conditions under which companies can access financing.
The new provisions include guarantees of up to 80% for certain investment loans, the possibility of accessing revolving credit facilities for working capital, and the granting of financing in euros.
For investment loans, the maximum guarantee percentage increases from 70% to 80% for SMEs that have their registered office or at least one authorized place of business in the counties of Suceava, Botoșani, Iasi, Vaslui, Galati, Tulcea, Constanta, Maramures, and Satu Mare.
In parallel, the portfolio guarantee offered by BID is also extended to revolving credit facilities for working capital, allowing companies to use the financing based on their current liquidity needs. Another new feature is the inclusion of Euro loans within the guarantee framework.
“By revising the agreement with CEC Bank, we are adapting the portfolio guarantee to company’s actual needs, offering them more options for investment financing and increased flexibility to support their ongoing operations. (..) We are focusing on reducing the barriers that prevent entrepreneurs from investing and growing their businesses, including those related to available collateral and the cost of financing,” explains Teodora Petre, Executive Director of the Commercial Area at the Investment and Development Bank (BID).
All loan applications backed by the BID portfolio guarantee also benefit from a reduction in the interest rate compared to the standard level, lowering the cost of financing for SMEs. Additionally, the BID guarantees involve no costs for the clients, and the approval process is managed entirely by CEC Bank, without entrepreneurs needing to apply for the guarantee separately from BID, the two institutions announced.
“The revision of the agreement with BID allows us to offer SMEs more financing options and, at the same time, real advantages in accessing loans. For companies making investments, the fact that the guarantee can reach up to 80% in certain counties can make all the difference in structuring a financing package, while for working capital, the availability of revolving credits brings extra flexibility,” underlines Ramona Ivan, Director of the National and International Institutional Relations Department at CEC Bank.
Since the beginning of the collaboration between CEC Bank and BID within the SME portfolio guarantee product, more than 55% of the loans granted with this guarantee have been intended for working capital, and approximately 45% for investments.
Most of the financing went to companies in the South, South-East, and North-West regions, and the requests targeted sectors such as the food industry and HoReCa (Hotel, Restaurant, and Café), construction and installations, wood processing, construction materials production, transport, and logistics.