Frequently asked questions  

1. What the guarantees of the Municipal Guarantee Fund for Small and Medium Enterprises (MGFSME) are designed for?

MGFSME can help Small and Medium Enterprises (SMEs) when there is a shortage of collateral required by partner banks (Banks).

2. Who can obtain a credit guarantee?
MGFSME guarantees credits to SMEs who are registered or operate in the territory of Sofia Municipality.


3. What type of guarantees issues MGFSME and what value they have?
MGFSME issues individual credit guarantees on credits provided to SMEs by Banks, taking into account the specificity of their particular purpose. MGFSME guarantee covers a part of the credit risk and provides up to 50 per cent of the loan principal of the credit provided to SMEs. The maximum value of guarantee commitment of MGFSME for each guarantee is BGN 100,000 (one hundred thousand), irrespective of the loan principal.


4. Is it possible to pledge the MGFSME's guarantee as primary collateral ?

The guarantee of MGFSME is a supplementary collateral for a credit provided by a Bank to SME. To be able to apply for MGFSME guarantee, the entrepreneur must be pledged in favor of the Bank another collateral, whose liquidation value is equal to minimum 60% of the loan principal and the Bank has accepted it as primary collateral..

5. Is it possible to pledge the MGFSME's guarantee as collateral for a bank guarantee?

MGFSME issues as supplementary collateral counter guarantees on bank guarantees extended by Banks, including on advance payment bank guarantees for disbursement of funds under the operational programs financed by the European Union and other international financial institutions.


6. Do guarantee commitments take for startup business?
MGFSME approaches individually to each proposed project and there are no restrictions in this regard.


7. What is the commission to obtain guarantee support by MGFSME?
The commission ranges from 0.25% to 1% of the guarantee commitment, depending on the credit risk assesment. Guarantees on loans fully secured in favor of the lending bank by first rank mortgage, government securities or cash deposit are exempted from commission.


8. How else could MGFSME support SMEs
MGFSME consults the entrepreneurs about:
- developing projects to apply for the operational programs financed by the European Union and other international financial institutions,
- accounting, law, management issues etc.

 

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