Central loan guarantee fund
Small and medium enterprises (as defined by the law) and professionals with VAT can benefit from the state guarantee. The guarantee from the central fund can reach up to 80% of the financial transaction for a maximum guaranteed amount of € 2,500,000 for each individual beneficiary. If the State guarantee is activated directly by the Banks, Asset Management Companies, leasing companies etc. we talk about direct guarantee. When the guarantee is issued by the Credit consortia, we talk about counter-guarantee (the Credit consortia releases the guarantee to the bank which in its turn counter-guarantees with the Central Loan Fund) at first request or subsidiary.
Beneficiaries of micro-credit operations (maximum € 25,000 in transactions) and businesses run by women (according to Law No. 215/1992) are exceptions. They can ask for the guarantee directly online on the guarantee fund portal (www.fondidigaranzia.it).
Access to the central fund directly or through the counter-guarantee is subject to a specific quantitative assessment process (evaluation of accounting data or unique models) and qualitative (verification of the type of activity, type of transaction, residence, duration of the operation etc.).
For innovative start-ups, innovative SMEs, incubators, social enterprises and micro-credit operations, on the contrary, the preliminary procedure is simplified, with priority access and without evaluation of accounting data.
Compared to a personal guarantee, the intervention of the Central Fund is assisted by the State’s last-resort guarantee, which involves the mitigation of credit risk on direct guarantees and counter-guarantees on first demand, effectively eliminating the absorption of capital for the lenders on the guaranteed financing share.
MedioCredito Centrale is a financial institution whose mission is to contribute to the development of the economic system by strengthening the medium and long-term credit facilities. It supports the SME projects and business initiatives deserving credit both through its own credit activity and by promoting and facilitating the use of different forms of public subsidies. It was founded as an institution of public law in 1952, rising from the boom of industrial reconstruction. The main purpose of this entity is to ensure the programs for the provision of public facilities and develop support services to companies who want to expand abroad.
The Bank of Mezzogiorno – “MedioCredito Centrale” was set up on 1 August 2011.
The products of The Bank of Mezzogiorno are designed to finance the investments, already made or to be made and the financial needs in any case connected to the activity of a company. At the same time the Bank has confirmed its role as a primary intermediary for facilitation and financial engineering instruments in Southern Italy and throughout the country. The bank manages the Central Guarantee Fund to guarantee the financing for the development of Italian SMEs.
To whom it is addressed:
The Guarantee Fund supports the development of Italian micro, small and medium enterprises by granting a public guarantee in the face of the loans granted by banks.
With the intervention of the Fund for the counter-guaranteed quota with the ZERO RISK, as the eventual insolvency of the company, is reimbursed by the Central Guarantee Fund and in case of depletion of funds of the latter, the reimbursement comes directly from the State.
All SMEs, according to the European definition, i.e. companies ranging from individual firms to companies with a maximum of 250 employees, with a turnover of up to 50 million euros and a maximum of 43 million active on the Balance Sheet, “economically and financially healthy”, can take advantage of the funds set aside by the Ministry of the Treasury assigned to the Medio Credito Centrale in Rome, to obtain guarantees to cover the credits obtained from the banking system.
These guarantees have the characteristic of being on first demand and, for banks, they are counted as “zero weighting” which means that for the amount covered by the guarantee the bank does not have to set aside assets to cover any loss.
In fact, it’s the paying state of the “last resort” that guarantees the solvency of the SME system. This guarantee can be requested directly by the Bank when it deems to entrust the company. In the form of a counter-guarantee if the bank is already guaranteed by the Credit Consortia which, in turn, ensures that it is guaranteed by the Fund. Or as a co-guarantee when the Credit Consortia and the Fund intervene jointly to cover the Bank’s risk.
It is evident that the “weight” of these guarantees facilitates a company to get a credit and at the same time helps to determine the most advantageous “pricing”. Of course, this guarantee can be accessed by SMEs that obtain a positive rating which is assigned according to a “scoring” set up by parameters defined by the fund manager. Businesses run by women benefit from the advantages like both the intensive assistance and the cost that must be recognized by the fund manager upon obtaining the guarantee.