EU funds 9 June 2020, 9:27am

Hungary offers interest-free loan to SMEs

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As part of the Hungarian government’s economic protection measures, a new interest-free loan facility will be available to small businesses as of this week, Finance Minister Mihály Varga announced. At present, this is the cheapest source of financing both for operations during the crisis and for preparing for the competition after the economy restarts, the minister added.

The government decided in May to amend the annual budget of the Economic Development and Innovation Operational Programme (EDIOP/GINOP) to provide HUF 420 bn in development funding for economic protection measures, Varga said. The new HUF 137 bn Loan Scheme for Technology Upgrades at Micro and Small Businesses will also be funded from this amount. Hungarian businesses are the engine of restarting the economy, which is why the government intends to offer them the best possible conditions and resources, Varga said. The interest-free loan facility also offers stand-alone financing for current assets and liquidity in addition to the previous development purposes.

Half of the programme’s budget will be available for investments, while the other 50% is intended to finance liquidity and operations. The highest amount available for investments is HUF 150 mn, while asset and liquidity financing loans are capped at HUF 300 mn. The interest-free loan will be available from 12 June at MFB Points nationwide.

The programme is not just an opportunity for businesses to weather the crisis but also to become successful participants of the economy’s rebooting and further growth, according to Levente Sipos-Tompa, president-CEO of the state-owned Hungarian Development Bank (MFB), the operator of the MFB Point network. The application conditions and the possible loan purposes have been shaped to offer interest-free financing to as many businesses as possible, he added.

In line with the GINOP’s general conditions, the loan will be available to resident businesses with a registered seat or premises in Hungary (except the Central Hungarian region) or with a registered seat in the European Economic Area and a branch office in Hungary (except Central Hungary).