Five news to the IMM invest programme, according to the emergency ordonance no. 143 of august 24th, 2020

The Emergency Ordinance No 143 of 24 August 2020 was published, for the amendment of OUG No 110/2017 on the IMM INVEST ROMANIA programme, to support small and medium-sized enterprises and to amend and supplement the State aid scheme in support of IMM activity in the context of the economic crisis caused by the COVID pandemic19, approved by Article II of OUG 42/2020.

Since the implementation of the INVEST Romania programme for IMM’S, a number of problems and constraints have been identified which hamper the implementation of the funding and guarantee lines offered by the programme, and required simplifications and access to finance for IMM’S more flexible.

According to the promoters of the Ordinance, the consequences of not taking such measures would seriously damage the economic activity of a significant number of small and medium-sized enterprises in all sectors of activity in Romania, linked to the emergence of social effects caused by the dismissal of a significant mass of Romanian employees currently employed in small and medium-sized enterprises, with negative implications for the process of economic recovery.

Therefore, the following five important amendments to the IMM Invest Romania programme were adopted to address these deficiencies:

1. For those wishing to apply for these loans, the exemption of the payment of interst will be offered for a period of 8 months from the date on which the loan was granted.

2. However, most probably no subsidies on interests shall be granted from next year onwards. According to the decree, it will be possible to subsidise the interest in the following years only if the economic growth estimated by the National Strategy and Forecasting Commission will be lower than the economic growth in 2020. According to the decree, if the National Strategy and Forecasting Commission (CNSP) will estimate en  economic development for the next year higher than this year, then the subventions is not granted. Since, historically, the NSP is always very optimistic and if we look at the latest published report with the next year estimation  (4% economic growth for 2021), it is clear that no interest will be subsidized next year. It is likely that the government will not issue further decrees to allocate the budget for this purpose.

3. The budget of the State aid scheme for grants was increased to 1,1 billion lei, about 228,42 million euro. This is because the total guarantee ceiling for 2020 has been increased by 5 billion lei to 20 billion lei.

4. The date by which payments of grants under the State aid scheme may be made at the same time as the budget increase and the guarantee ceiling of the scheme shall be 31 October 2021.

5. Micro and small enterprises that have taken out loans/lines of credit for working capital will be able to apply for other loans for the same thing, up to 5 million lei.