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Chancellery of Prime Minister of Republic : Further support for entrepreneurs – Financial Shield of the Polish Development Fund 2.0 has just been launched

12/03/2020 | 10:27am EST

'We have been struggling with health and economic consequences of the pandemic for 9 months. Our anti-crisis measures produce the desired results in the field of both economic activity and unemployment; these are good indicators and we can see the light at the end of the tunnel, said the Prime Minister Mateusz Morawiecki, The Shield 2.0 programme has just been launched today. It is dedicated to the industries that have been most affected by the crisis. There are approx. 40 such sectors in total. A new industry-specific shield that will be crucial has been prepared. We are talking here about the allocation of at least PLN 35 billion to micro-businesses, small and medium enterprises, and large companies, added the head of the government.

As much as PLN 35 billion will be allocated under the Financial Shield of the Polish Development Fund 2.0 to support micro-businesses, small and medium enterprises, and large companies. What conditions should entrepreneurs meet to apply for subsidies?

Financial Shield of the Polish Development Fund 2.0 for micro-businesses - up to PLN 3 billion of support

  • For companies hiring from 1 to 9 employees and operating in 38 industries included in the Polish Classification of Activities
  • Turnover or balance sheet total for 2019 not exceeding EUR 2 million
  • Financial subsidies - PLN 18 thousand or PLN 36 thousand per employee
  • Subsidies up to the maximum amount of PLN 324 thousand
  • Subsidies depending on the number of employees and decrease in turnover
  • For companies that recorded a decrease of at least 30% in turnover for 2020 as a result of COVID-19
  • Non-repayable funds provided that a company continues to conduct its business activity and maintains the same employment level for a period of 12 months
  • Deadline for submission of applications: January - February 2021 (upon approval by the EC)

Financial Shield of the Polish Development Fund 2.0 for small and medium enterprises - up to PLN 7 billion of support

  • For companies hiring up to 249 employees and operating in 38 industries included in the Polish Classification of Activities
  • Turnover for 2019 of less than or equal to EUR 50 million and balance sheet total not exceeding EUR 43 million
  • Subsidies for fixed costs not covered by revenues, in the form of financial subsidies in the amount of 70% of gross loss for the period from 1 November 2020 to 30 April 2021
  • Subsidies up to the maximum amount of PLN 3.5 million
  • Subsidies depending on estimated costs and revenues as well as gross loss
  • For companies that recorded a decrease of at least 30% in turnover as a result of COVID-19
  • Non-repayable funds provided that a company continues to conduct its business activity and accounts for subsidies on the basis of financing 70% of gross loss
  • Deadline for submission of applications: January - February 2021 (upon approval by the EC)

Additionally: Possible redemption of 100% of subsidies granted under the Financial Shield 1.0 (deadline for submission of applications: one year after receiving subsidies under the Financial Shield 1.0)

Financial Shield 2.0 for large companies - approx. PLN 25 billion of support and greater flexibility of programme principles

  • For companies hiring more than 250 employees and achieving a turnover of more than EUR 50 million
  • Update of conditions, extension of the existing programme, implementation of a new version of preferential loans with a new COVID-19-induced damage period until 31 March 2021
  • Deadline for submission of applications: January - March 2021 (upon approval by the EC)

Owing to the experience gained during the implementation of the programme, we have changed its format:

  • substantially simplified process for small amounts of aid
  • maintained repayable nature of funds with a possible redemption of the aid loan, which entails a full credit analysis process
  • greater flexibility in the scope of the financing period, which is extended from 4 to 6 years, and cost reduction

What changes have been introduced in case of large companies?

Liquidity loan:

  • Updated and extended programme - applications to be submitted until 31 March 2021 and agreements to be concluded until 30 June 2021
  • Reduced interest rate, extended loan repayment period from 4 to 6 years
  • Extended grace period for the repayment of loans and simplified process for small transactions

Preferential loan:

Extended period of processing applications for the current preferential loan and implementation of a new version of the preferential loan with a new COVID-19-induced damage period (01 November 2020 to 31 March 2021)

  • applications to be submitted until 31 March 2021 and agreements to be concluded until 30 June 2021
  • Reduced interest rate, loan repayment period extended from 4 to 6 years
  • Extended grace period for the repayment of loans and more precisely defined eligibility criteria

In this case, it is necessary to notify and obtain the decision of the European Commission.

Equity instruments (both public aid and market instruments)

  • Extended period for the conclusion of agreements until 30 September 2021

No individual notification is required (a general decision will be issued by the EC in this regard)

What conditions should entrepreneurs meet to receive the support under the Financial Shield of the Polish Development Fund 2.0?

The conditions that entrepreneurs should meet to receive the support under the Financial Shield of the Polish Development Fund 2.0 depend, among other things, on the size of the company and the level of revenue decline.

Conditions for micro-businesses

The amount of subsidies for micro-businesses is calculated as the product of the number of employees as at 30 September 2020 and the base amount of the subsidy. This amount depends on the decrease in revenues generated in the period from April to December or from October to December 2020 compared to the same period in 2019.

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The maximum amount of subsidies granted to an entrepreneur under both Financial Shields cannot exceed PLN 72 thousand per one employee. The financial subsidies are non-repayable provided that the following conditions are met:

  • the business activity is still conducted as at 31 December 2021,
  • the average level of employment in 2021 is comparable to that in 2020.

Conditions for small and medium enterprises

The support under the Financial Shield of the Polish Development Fund 2.0 will be provided to companies the turnover of which fell at least by 30% due to COVID-19 compared to the same period in 2019.

The amount of subsidies for Small and Medium Enterprises is the sum of:

  • predicted fixed costs that may be incurred by an entrepreneur to the best of his/her knowledge, and
  • incurred fixed costs that are not covered by the gross profit as part of the company's activities and other sources such as insurance, other aid funds granted under the Temporary Framework or support from other sources, within 6 months in the period from November 2020 and April 2021.

At the same time, the amount of funds granted under the Programme may not exceed the product of the number of employees and PLN 72 thousand.

The amount of subsidies for small and medium enterprises covers 70% of the gross loss incurred by the beneficiary in the period from November 2020 to April 2021:

  • gross loss does not include the provision for assets
  • gross loss includes support obtained from other sources

The financial subsidy is non-repayable provided that both of the following conditions are met:

  • the business activity is still conducted as at 31 December 2021,
  • the surplus is recognised by 31 October 2021, subject to the provision that it is not possible to compensate for costs incurred in excess of the support received,
  • the settlement of the net loss is presented based on financial statements.

Rules on the use of subsidies

  • Funds may only be used to cover costs of business activity, e.g. salaries.
  • The funds may not be used to prepay loans, leases or other similar instruments.
  • The funds received may not be allocated for payments to the business owner or to individuals or entities related to the business owner.
  • The funds received may not be used to finance the takeover or acquisition of another enterprise.

Support provided to 38 industries (possible changes)

The support under the Financial Shield of the Polish Development Fund 2.0 will be provided to the following business activities included in the Polish Classification of Activities:

  • 49.39.Z - Other passenger land transport services not elsewhere classified
  • 47.71.Z - Retail sale of clothing in specialised shops
  • 47.81.Z - Retail sale of food, beverages and tobacco products at stalls and markets
  • 47.82.Z - Retail sale of textiles, clothing and footwear at stalls and markets
  • 47.89.Z - Retail sale of other goods at stalls and markets
  • 56.21.Z - Event catering services
  • 55.10.Z - Hotels and similar accommodation services
  • 55.20.Z - Holiday and other short stay accommodation services
  • 56.10.A - Restaurants and other eating places
  • 56.10.B - Mobile eating places
  • 56.29.Z - Other food service activities
  • 56.30.Z - Beverage serving activities
  • 59.14.Z - Motion picture projection services
  • 74.20.Z - Photographic services
  • 77.21.Z - Rental and leasing of recreational and sports goods
  • 79.11.A - Travel agency services
  • 79.12.Z - Tour operator services
  • 79.11.B - Tour middlemen services
  • 79.90.A - Couriers on package tours and tour guides services
  • 79.90.B - Tourist information services
  • 79.90.C - Other reservation services not elsewhere classified
  • 82.30.Z - Organisation of conventions and trade shows
  • 85.51.Z - Out-of-school forms of sports and leisure education
  • 85.52.Z - Out-of-school forms of cultural education
  • 86.90.A - Physiotherapeutical services
  • 86.90.D - Paramedical services
  • 90.01 Z - Performing arts services - band
  • 90.02.Z - Support services to performing arts
  • 90.04.Z - Arts facility operation services
  • 91.02.Z - Museum services
  • 93.11.Z - Sports facility operation services
  • 93.13.Z - Fitness facility operation services
  • 93.19.Z - Other sports services
  • 93.21.Z - Amusement park and theme park services
  • 93.29.A - Activities of escape rooms, houses of fear, places for dancing and other organised entertainment or recreation forms
  • 93.29.B - Other amusement and recreation services not elsewhere classified
  • 93.29.Z - Other amusement and recreation services
  • 96.04.Z - Physical well-being activities

Financial Shield and Anti-crisis Shield - how have they helped entrepreneurs?

The Polish government does not leave entrepreneurs without support. Due to the fact that the situation of Polish companies is getting worse day by day, we have allocated additional funds, among other things, under the Anti-crisis Shield and the Financial Shield of the Polish Development Fund 1.0.

So far, the funds provided under the Financial Shield of the Polish Development Fund 1.0 have been granted to as many as 347 thousand enterprises for a total amount of over PLN 60 billion. As a result, we have saved 3.2 million jobs. Most importantly, the aid was provided immediately - companies received the funds [PE7] within 2 days.

The Financial Shield of the Polish Development Funds is an example of the governmental support provided to enterprises. So far, we have allocated more than PLN 154 billion to Polish companies under the Financial Shield and the Anti-crisis Shield and managed to save approx. 6 million jobs. For comparison, the government anti-crisis packages granted between 2008 and 2009 amounted to approx. PLN 9 billion.

Better situation of Poland compared to other EU Member States

The latest forecasts by the European Commission show that Poland may handle the current crisis far better than most of the EU Member States. According to the estimates, Poland is predicted to suffer a slight decline in GDP compared to other Member States. 'We have the lowest decline in Poland. Some European countries are projected to go into recession they have not had for many years. This shows how serious the economic crisis is,' concluded the Prime Minister Mateusz Morawiecki.

Importantly, Poland has recorded the second lowest unemployment rate in the entire European Union. In September, the harmonised unemployment rate increased to 3.1%. This is the second lowest result after the Czech Republic. Meanwhile, unemployment oscillates around 8% in France and soars to over 16% in Spain.

Disclaimer

Chancellery of the Prime Minister of the Republic of Poland published this content on 26 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 December 2020 15:26:04 UTC


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