United Bulgarian Bank (UBB) and the Fund Manager of Financial Instruments in Bulgaria (FMFIB) have signed an agreement for a portfolio guarantee worth BGN 128 million. The new instrument, entitled „Loss-capped Portfolio Guarantee to Overcome the Effects from the COVID-19“, has been financed with funds under Operational Programme Innovations and Competitiveness 2014-2020. Through it the Bank is going to provide preferential financing to small and medium-sized businesses, as well as corporate clients, experiencing difficulties in line with the crisis, triggered by the COVID-19 pandemic.

The programme provides up to 80% free of charge guarantee, while clients are going to obtain more favourable terms, as compared to standard ones. By means of the new guarantee product UBB and the FMFIB will support small and medium-sized businesses in the present severe environment, thus facilitating their access to loans for continuing their activity, including also for covering their needs of liquidity and for overcoming pandemic-related financial difficulties.

The offering of loans under the FMFIB programme will be initiated as early as during the first months of the next year. The new instrument will enable UBB’s offering of financing at preferential pricing terms and relaxed collateral-related requirements.

Companies may use this product along two lines: investment loans with grace period up to 24 months for liability repayment and working capital loans with a grace period option of up to 12 months for the principal. The maximum amount of the guarantee under the loan is BGN 2.93 million upon a guarantee period of 5 years and BGN 1.46 million upon a guarantee period of 10 years. UBB will provide its clients with the opportunity to use interest subsidy for the first year, while observing the eligibility requirements and the rules for receiving de minimis state aid.