NBH Funding for Growth Scheme 2nd phase

 


UniCredit Bank offers loans under Phase 2 of the Funding for Growth Scheme (hereinafter FGS) Program launched by the National Bank of Hungary (hereinafter NBH), which continues to aim at improving the financing of companies classified as micro, small and medium-sized enterprises pursuant to Act XXXIV of 2004.

For which purposes can the NBH Growth Scheme Loan be used?

  • Under Pillar I.:
    • for financing of a new investment project1,
    • for new working capital financing2,
    • for pre-financing of EU subsidies.
  • Under Pillar II.:
    • for HUF loans or financial leasing, taken by the Client earlier from a domestic credit institution or financial enterprise in Hungary for the purposes specified above may be refinanced with a loan,
    • for FX loans or financial leasing (taken or booked in foreign currency) taken by the client from a domestic credit institution or financial enterprise in Hungary may be refinanced with a HUF loan.

Under Pillar II. the ratio of the loans taken for refinancing loans or financial leasing at a credit institution cannot be higher than 10% of the total loans disbursed to the credit institution under the two pillars.

Why is the NBH Growth Scheme Loan advantageous to your company?

  • Access to financing with an extremely favourable cost of maximum 2.5% p.a., fixed for the entire term of the loan (including interest, other bank charges except for the fee of the guarantee institution):
    • new working capital loans, investment loans or loans for pre-financing EU subsidies, or
    • possibility of the conversion of a HUF loan or financial leasing, taken earlier from resident credit institutions or financial enterprises for the purposes outlined above, or FX or FX denominated loans, taken for any other purpose and outstanding since 31 March 2013 into a preferential HUF loan.
  • You can cover your funds need for long term in case of investment loan (for maximum 10 years) and the lower debt service could be helpful in case of investments and developments with a longer payback period.

For whom do we recommend NBH Growth Scheme Loans?

To all resident enterprises, whose loan demand satisfies the conditions of this product and which satisfy the criteria of Act XXXIV of 2004 on small and medium-sized enterprises and support to their development (hereinafter: ‘SME Act’)3  and the conditions defined in product description of NBH on the FGS Program at the time of the borrowing and submit a warranty declaration towards the bank stating

  • that they qualify as an SME pursuant to the SME Act at the time of the borrowing and specify the parties that classify as partner undertakings or affiliated undertakings pursuant to the SME Act and
  • the parties in relation to which/whom the affiliated undertaking, defined in Act C of 2000 on accounting prevails and
  • that the SME and the obligor of a collateral falling within the scope of interest of the SME do not qualify as an affiliated undertaking of any credit institution as defined in Act C of 2000 on accounting, and
  • to undertake to fulfil the obligations set for them in the loan contract.
    Those companies may receive a loan under the Program that do not have any overdue public debt or debt from borrowing and whose credit rating and collateral structure are acceptable to the Bank for the borrowing and their credit assessment at the bank is concluded positively.

Main features of the NBH Growth Scheme Loans

  • Loan amount: The limit amount defined in advance is determined according to the credit assessment, but at least HUF 3 million and no more than HUF 10 billion, which pertains to the total borrowing under phase one and phase two of the FGS as specified below: new HUF loans and HUF loan refinancing, or new financial lease and HUF lease refinancing in the first and second phase of the FGS may collectively not be more than HUF 10 billion; the total of FX loan and FX financial lease refinancing under pillar II of the first phase and pillar II of the second phase may again not be more than HUF 10 billion, and the same SME group may borrow no more than HUF 10 billion twice.4
  • Type of loan: Not revolving5, short-term or long-term loan.
  • Availability period: For every refinancing loan by 31 December 2015.
    For new investment loans6 and for pre-financing of investment related EU subsidies as well as for working capital loans by 30 December 2016.
    If the loan relates to the pre-financing of (e.g., normative) EU subsidies available on an annual basis, the loan amount used by 30 December 2016 will become a revolving loan and the repaid loans may be drawn again (for the same purposes) within three years from the conclusion of the contract, but no later than by 31 December 2018.
  • Term:
    • For an investment loan (both new and refinanced) maximum 10 years, or until no later than 31 December 2025.
    • For working capital loans (new and refinanced), and refinancing of other FX loans for unlimited purposes maximum 3 years.
    • The term and repayment schedule of the refinanced loan may be different from the tenor of the underlying transaction.
    • In the case of pre-financing of EU subsidies, the term is maximum 10 years but not later than 31 December 2025 under the condition that the loan amount financing the subsidies shall be repayable in one lump sum when the subsidy is disbursed (if the subsidy is disbursed in instalments, then up to the amount of the disbursed instalment).
  • Disbursement: The credit institution cannot disburse the loan to the Client sooner than its actual utilisation or utilisation certified with invoices (pro forma invoices are acceptable for disbursement) with the exception of loans granted for purchasing stocks, in which case the Client has 15 days after disbursement to use the loan for its purposes.
  • Repayment: Monthly or 3-monthly in equal instalments, or instalments according to the payment schedule after the expiry of the grace period, on the last working day of the respective month, or in one lump sum (bullet) upon maturity.
  • Interest payment: On a monthly basis, on the last banking day of the first or third month from disbursement, when the principal and interest payment will be due on the same day.
  • Own funds: To be defined based on the bank’s decision, depending on Client rating.
  • Currency: HUF
  • Credit fee and interest: The interest rate and fees associated with the loan cannot exceed 2.5% p.a., including all other charges, fees, commission, with the exception of those listed below. The interest rate is fixed during the entire term of the loan and will be established by the bank depending on the Client rating.
  • Other charges: Costs payable to third parties in relation to the loan (e.g., fees of an attorney-at-law, valuation fee, fees payable to a notary public, or registration of the mortgage as well as the fee payable to the guarantee institution), penalties or default interest, commitment fee and contract modification fee according to the list of conditions of the bank in connection with modifications acceptable in the program and initiated by the client during the term of the loan (including collateral modification but excluding prepayment) are allowed to be charged.
  • Commitment fee: The NBH charges a flat 2% (not time proportionate) commitment fee to the Client for part of the SME contracts reported to the NBH that are not drawn by the end of the commitment period, to be passed on to the Client by the bank. In relation to the pre-financing of (e.g., normative) EU subsidies applicable on an annual basis, the commitment fee is payable for the difference between the contracted amount and the highest loan amount, drawn by 30 December 2016.


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Special documents to be submitted with the application by the Client

  • SME warranty declaration in 2 original copies (mandatory annex of the loan agreement),
  • tax declaration of the company, in which the Client declares its SME status,
  • if a loan is refinanced within the bank, in addition to the above: a declaration of the Client on the data of the loan to be refinanced,
  • in the case of the refinancing of a loan or financial leasing in a different bank or financial enterprise, in addition to the above:
    • the loan or financial leasing agreement to be refinanced, and
    • a declaration of the bank or financial enterprise granting the loan to be refinanced on the outstanding principal amount, and
    • a declaration from the client with the data of the loan or financial leasing to be refinanced.

Other conditions

  • Purchases and account receivables from the direct or indirect owners, executive officers, senior employees of the applicant enterprise or from the close relatives of such persons and from undertakings even partially owned or controlled by all these persons and from within the group of companies or between the affiliated companies8 of the group, and the acquisitions and capital increases in such companies, furthermore investments to be realized through the cooperation of all these persons subject to certain liabilities may not be financed under the scheme.
  • No participation may be purchased or capital increase may be made in undertakings whose activity is contradictory to the conditions mentioned as regards the purchase of assets (e.g. the letting out of the purchased real estate or renting cars), or in businesses that are engaged in the sale or holding of participations or securities, meaning that the acquisition of participation may not be abusively used for the indirect purchase of assets not eligible for financing under the scheme.
  • Post-financing of assets purchased and paid earlier from own resources is not permitted under the scheme, except for the refinancing of invoices paid from own resources at most 30 days prior to the individual disbursement in one package in relation to investment loans and EU subsidy pre-financing loans.
  • (Partial) investment activities performed within the own undertaking or generated by the Borrower (with own overhead, not certifiable with invoices) may not be financed under the scheme either.
  • Under the scheme a real-estate property registered as residential property (flat according to Sect. 73 Art. 3 of the Act CXVII of 1995) or holiday resort based on its main character of destination can be refinanced only in the following cases and under the following conditions.
    • Under the NBH FGS a loan may only be granted for the acquisition of the ownership, construction, extension, refurbishment or reconstruction of a real-estate property registered as a resort or residential property, if from among the activities regulated by the Government Decree No. 239/2009. (X. 20.) on the detailed conditions of engagement in accommodation service activities and the procedure for the issuance of accommodation licenses, the SME pursues or will pursue the operation of hotel, pension, camping, holiday house, community accommodation as defined in subsections § 2 c)-g) of the Government Decree in this building.
      The SME shall certify to the bank the acquisition of the regulatory licence for providing hotel services within one year from the disbursement of the last drawn portion of the loan and shall also present the licence to the bank. If that condition is not met, the legal consequences of the use of the loan for purposes other than its objective shall be applied.
    • Constructing an energy efficient building consisting of at least 5 flats and registered as residential property or holiday resort with the purpose of renting can be financed by FGS loan as well. Buildings are considered energy efficient if the overall energy performance of the whole building achieves at least energy rating A according to Annex. 1. of the Government Decree No. 176/2008 (VI.30.) on Certification of Energetic Characteristics of Buildings. The Client is obliged to certify this energy rating to the Bank within 12 months following the last disbursement at the latest. If the certificate on the prescribed energy rating is failed to be provided within the deadline, the legal consequences of the use of the loan for purposes other than its objective shall be applied. If the flat/s belonging to the built property is/are sold during the term of the loan, that part of the outstanding loan proportional to the value of the sold flat/s becomes due immediately. The activity of NACE 6820 necessary for renting has to be included the Borrower’s activities.
  • The purchase of passenger cars (passenger car within the meaning of section 3 (45) of the Act CXVII of 1995, except those under customs tariff heading 8704) may only be financed if the main activity of the SME has been passenger transportation continuously since 28 February 2014 (NACE 4930, 4931, 4932, 4939).
  • Under the scheme only assets (real estate) serving the business activity can be purchased, thus those cannot be let out and in the case of purchase encumbered with rental right the legal relation cannot be maintained.  In the case of real estate investment the reclassification of real estate to residential or resort property during the term shall be considered as the breach of this condition.
  • The ban on letting does not apply to:
    • SMEs with activities of which already included an activity belonging to the NACE 77 category (“Rental, operational leasing”) on 28 February 2014 and therefore rented out the asset purchased from the investment loan within the framework of that regular business activity.
    • The building of a real estate property(in case of real-estate properties not registered as residential properties or holiday resorts including extension, conversion and reconstruction with the purpose of letting out on a professional basis, if NACE 6820 Renting and operating of own or leased real estate is included in the debtor’s activities. Consequently, for purchases made for letting purposes, this activity of the Client cannot be financed either.
    • The letting out or transferring the operation (irrespective of the activity of the SME) of the asset being the subject matter of the investment (including also the real-estate property with the exception of residential properties and holiday resorts) within the group of companies with the condition that the lessee or operator within the group may not pass on the right to use of the purchased real-estate property to a third party (outside the group). The purchase of real properties to be leased outside the group is not eligible for financing, even if it is pursued as a business activity with the exception described in the following point. In such cases, a group means that at least 50% of the owners of the lessee and the SME (lessor) are (whether directly or indirectly) identical. In relation to the financing of acquisition and letting of arable land, it is also acceptable if the owner who borrows the loan holds at least 50% in the business association leasing the land together with his or her direct relatives.
    • The prohibition of letting does not apply to commercial properties that were used or are still used as collateral of a loan (or subject matter of a leasing transaction) – constituting part of the consolidated balance sheet of the original financing institution – terminated or deemed non-performing prior to 31 March 2014. In such cases an investment loan may be granted for the acquisition of the real property to be followed by its conversion, modernisation and refurbishment. The detailed terms and conditions are described in the NBH FGS 2 Product Information.
    • However, the above permissive conditions may not be fraudulently used for purposes whereby the purchased assets are made available for long-term use to undertakings that exceed the limits defined in section 3 (1) of the SME Act or having owners defined in section 3 (4) of the SME Act, or when the purchased assets are not used for business purposes. Long-term use by an entity not eligible to take up loans within the framework of the Program is not considered fraudulent if the purchase of the assets and their financing had been realised by the Client without the Program as well and the Client were ready to rent the asset to any entities, which means the purchase of the assets through the Client does not take place in order to evade the personal conditions of the Program. The residential property built by the Client cannot be rented to the owners, employees of the Client, respectively to their close relatives or enterprises owned or managed by them. The above conditions must prevail during the entire term of the loan, otherwise the loan shall be repaid immediately upon the breach or failure to maintain the condition.
  • If the ownership or the right to use of the asset involved in the investment is transferred or assigned, the loan shall be repaid immediately. If a part of the investment financed with the loan is transferred or encumbered, in this case the only proportion of the outstanding loan amount linked to the asset(s) concerned must be repaid. (This condition does not apply to the refinancing of FX loans.)
  • It is a further requirement for the SME taking part in the scheme that any party acquiring ownership in it after the conclusion of the Loan Agreement, and the owners not qualified as SMEs or private individuals at the time of concluding the Loan Agreement may own at most 50 per cent ownership in the next 2 years following the conclusion of the Loan Agreement (either by capital increase, transformation, merger, fusion, and/or by taking into consideration also the changes to the persons of indirect owner(s)) with the condition that, the direct and indirect participation of owners not meeting the personal conditions applicable to SMEs and non-private individual (including state owners and municipality owners) new or at the time of concluding the Loan Agreement existing owners may not be more than 25%. An exception from this is acquisition of ownership through inheritance. Furthermore, regarding the restrictions on the Client’s owners, the regulations prescribed for owners qualified as private persons shall be applicable to the property ratio of those not profit oriented organisations (e. g. foundations, associations), in which neither the direct nor the indirect aggregated property ratio of state owners and municipality owners exceeds 25 percent.
  • After 2 years following the conclusion of the SME loan agreement, the rate of acquisition by new owners will not be limited during the term of the loan, although any participation over 25% may be held only by an enterprise or a natural person satisfying the requirements of Act XXXIV of 2004 (aggregated direct or indirect state and municipality ownership exceeding 25% is also excluded here). If these conditions are not met, the refinancing loan must be immediately repaid.
  • In relation to HUF loans or financial leasing to be refinanced, the Client shall certify to the bank, either with a loan agreement or with invoices, that the loan to be refinanced was used for any of the objectives defined in the scheme.
  • With the exception of overdraft facilities and EU subsidy pre-financing loans applicable on a yearly basis, no revolving loans may be granted under either pillar.
  • The client shall use the disbursed loan immediately only for the specified loan objective or, when it is requested for refinancing FX loans, to refinance the FX loan.
  • The Client undertakes to maintain the use of the working capital loans taken under the scheme for the original loan objective during the entire term of the loan and to certify that to the bank.
  • Any generally acceptable banking security is acceptable for the borrowing. In addition, joint and several guarantees of Garantiqa Hitelgarancia Zrt. and the Agrár-Vállalkozási Hitelgarancia Alapítvány (Rural Credit Guarantee Foundation - AVHGA) may also be used in compliance with the support limits.
  • In case any requirement of the credit scheme or the loan agreement with the Client is not fulfilled, the bank shall terminate the loan agreement upon the NBH’s instruction and the Client shall repay the loan to the bank with immediate effect together with penalty interest, calculated at the rate of twice the currently effective base rate of the central bank, charged from the date of disbursement.
  •  FX and HUF loans, restructured after 28 February 2014 may not be refinanced under the scheme.
  • The loan or financial leasing to be refinanced under the scheme may not involve any payment, overdue for more than 90 days.
  • Loans, outstanding for more than 90 days and extended9 or restructured loans10 and loans terminated by the bank shall be repaid to the NBH immediately.  This means that unless the bank exercises its right to terminate the loan with immediate effect against the Client, the loan will be converted into a loan under market rates and conditions.

More information

Other details of the credit scheme are available on the NBH website: www.mnb.hu

 

If you are interested in this product information, please do not hesitate to contact your relationship manager or any member of our branch staff with your enquiry.

 

This information should not be considered an offer. The Bank reserves the right to change the conditions. UniCredit Bank reserves the right to decide individually on loan disbursement and on the amount and conditions thereof, based on the account overdraft application and documents submitted.

 

1 For the purposes of the NBH, an investment loan means any loan extended for the purchase and establishment of intangible assets and tangible assets as defined in Art. 25 and Art 26 of the Act C of 2000 on Accounting (Accounting Act), for the reconstruction, modernization and capacity extension of existing assets, furthermore, in relation to long-term participations defined in Art. 27 of the Accounting Act, for the acquisition of participation in an undertaking with registered office in Hungary, founded before 28 February 2014 resulting in at least 10 per cent ownership share.

2 For the purposes of the scheme and the, NBH working capital financing refers to loans provided for purchasing stocks defined in Article 28 (2)-(4) of the Accounting Act and trade receivables defined in Article 29 (2) of the Accounting Act.

3 Based on the declaration issued by NBH on 22.01.2015 enterprises that meet the SME criteria of Act XXXIV of 2004 with the exception of the upper limit regarding the number of employees are also eligible for NBH Growth Scheme Loans in Phase 2.

4 These upper limits represent at the same time the maximum amount of loans that can be taken collectively by the SME and its partner enterprises and its linked companies according to Act XXXIV of 2004 on Small and Medium-sized Enterprises and the Promotion of their Development from all the credit institutions and financial institutions participating in the Growth Scheme.

5  Except for loans pre-financing (e.g., normative) EU subsidies and applicable on an annual basis.

6  New (not refinanced) investment loans granted under Pillar I may be drawn by 30 December 2016 under the following terms and conditions:
the SME must draw and use at least 30% of the contracted amount by 30 June 2016 and the Bank must receive the complete drawdown request by 27 June. In terms of 30% of the contracted amount, commitment fees payable to the NBH for the not drawn portion, but the amount will still be committed, i.e., that portion can still be drawn by the end of the commitment period,
the SME must use the remaining 70% of the contracted amount by 30 December 2016, in relation to which the Bank must receive the complete drawdown request by 27 December 2016. With regard to the 70% portion, a commitment fee is payable to the NBH for the amount not drawn.

7  The terms and conditions of working capital loans also apply to the financing of assets purchased or produced to be re-sold, also including real properties by taking into consideration that no working capital loan can be granted within the program for the acquisition of the ownership, construction, extension, refurbishment or reconstruction of a real-estate property registered as a resort or residential property with the purpose of resale. However, those SMEs are entitled to utilise such loan that carries out construction activity with the purpose of raising a new energy efficient residential building consisting of at least 5 flats for resale or with the purpose of modernising such existing building.

8 If a company exercises at least 20% of the voting rights or ownership rights in another company, directly or through its owner, such companies must be considered as a group of companies; by fractional ownership the ownership of a participation of at least 20 per cent must be meant; by control the ownership of at least 20 per cent of voting rights must be meant, furthermore the senior employees within the meaning of Act I of 2012 on the Labor Code and until 15th March 2014 the members of the general management according to Act IV of 2006 on business associations and after 15th March 2014 according to the new Civil Code (Act V of 2013).  In the case of inheritance the purchase of intra-group participation from the heir is permitted irrespective of the extent of fractional ownership.

9 Renewal means the assumption of debts and assignment of rights arising from the loan agreement, and the re-conclusion of the loan agreement by and between the original contracting parties.

10 For the purposes of the loans granted and refinanced under the scheme restructuring means the concept defined in Chapter IV of Annex 7 to Government Decree 250/2000 (XII. 24.) on the annual reporting and book-keeping obligations of credit institutions and financial enterprises. With respect to credits extended under the scheme also to those refinancing a previously disbursed FGS loan, the modification of the repayment schedule of more than 25 per cent of the outstanding principal debt as compared to the status of the given agreement/the agreement of the refinanced FGS loan at the time of first data supply shall be considered as restructuring even if it did not take place due to the financial difficulties of the SME – according to subparagraph 2 (48) a) of the above referenced Government Decree – except if it affects only the date of principal repayment within the month. The SME’s agreement may be amended during the term of the loan under this pretext two times at most, and the total number of amendments may also not be more than this. Changes due to pre-payment shall not be considered as restructuring. The modification of working capital loan agreements, concluded under the scheme for a maximum term of one year prior to the entry into force of the NBH Product Information, modified on 5 May 2014, to a 3-year term shall not constitute restructuring, unless it takes place due to the debtor’s payment difficulties.

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UniCredit Bank Hungary Zrt.


Head Office: 1054 Budapest, Szabadság tér 5-6.
Post address: 1242 Budapest Pf. 386

Tel.: +36 (1/20/30/70) 325 3200
Fax: 06/1-353-4959


Bank code: 109
SWIFT: BACXHUHB
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