Main warranty scheme

The Municipal Guarantee Fund covers part of the credit risk and secures up to 50% of the amount of the loan principal or up to BGN 100 000. Up to now, as a “Guarantee Fund”, we have supported over 625 SME projects by contributing to lending over BGN 117 million with a guarantee commitment of the Fund of about BGN 31 million.

Requirements for SMEs to receive warranty support from the Fund:

• meet the criteria for small and medium-sized enterprises under the SME Act;
• their headquarters be on the territory of Sofia Municipality or their business project to be realized on the territory of the municipality;
• have a collateral on the loan with a liquidation value as assessed by the bank for at least 60% of the value of the loan.

For each guarantee issued to the bank, the Municipal Guarantee Fund charges a commission depending on the degree of the risk. The credit risk guarantee enters into force once the bank transfers the first installment of the due commission to the Municipal Guarantee Fund. Guarantees on loans secured to the bank by government securities, cash deposits or first mortgage.