DeLFI GF

What is DeLFI GF?

The program “Development Law Financial Instrument Guarantee Fund (DeLFI GF)” is a financial tool of the Portfolio Fund “Entrepreneurship Fund” (TEPIX), implemented by the Hellenic Development Bank S.A. (HDB), with resources funded by the Greek State.

Its purpose is to enhance the competitiveness of innovative (start-up and existing sustainable) very small, small, and medium-sized enterprises (SMEs) for the implementation of investment projects that have been approved under the new Development Law No. 4887/2022, while simultaneously indicating their potential participation in a financial instrument, providing credit risk protection in the form of a guarantee.

Purpose

Financing on favorable terms for:
• Part of the private contribution of the investment project included under Development Law 4887/2022
• Part of the grant that the company is entitled to for the investment project included under Development Law 4887/2022

The requirement is that the private contribution must be at least 25% of the investment project’s budget. The private contribution must come from private resources or external financing, without state aid.

Main Loan Features

Loan Amount Loan Duration Interest Rate & Guarantee Percentage

From €50,000 to €10,000,000

Provided that the limits on the accumulation of state aid are respected, an investment project may be financed simultaneously through separate loan agreements:
• with a medium-to-long-term loan for the medium-to-long-term loan portion of the approved investment’s financing scheme
• with a short-term bullet loan for the grant portion

From 3 to 10 years, including any grace period of up to 36 months, for medium-to-long-term loans.
From 1 to 5 years for short-term loans, including any grace period of up to 36 months.

The loan may be disbursed either in a lump sum or in installments. The first disbursement must take place no later than 4 months after the signing of the Loan Agreement. The maximum disbursement period is 36 months from the date of signing the Loan Agreement.

Interest Rate: Variable, based on the 3-month Euribor plus a margin ranging from 5% to 6.7%. The interest margin depends on the customer’s credit rating.
Guarantee Percentage: Guarantee from DeLFI GF to the lending bank, covering 80% of the Non-Performing Exposure of each loan.

Eligible Businesses

Must have received approval for the implementation of an investment project under the new Development Law No. 4887/2022.
Include all Very Small, Small, and Medium Enterprises (SMEs) that have been granted aid under Development Law 4887/2022 (Government Gazette 16/2022).
Must be legally established and operating in Greece, and have been founded up to the time of submitting the financing application to the Financial Institution.
They are not considered distressed.
They are deemed creditworthy according to the current credit policy and internal procedures of the Bank.
They are bank-compliant (have debts less than 90 days overdue) at the date of the financing application.
No exclusion reasons exist under Article 40 of Law 4488/17 (Government Gazette 137/139/17).
There is no outstanding order for recovery of previous illegal and incompatible state aid based on an EU or CJEU decision.
If they have participated in programs of HDB (formerly ETHEAN) that have ended or are ongoing and have not shown adverse transactional behavior in repaying their debts (loan default or overdue debts for more than ninety (90) days), or if they have shown adverse transactional behavior (loan default) but have fully repaid their debts before submitting the financing application, or if it concerns a guarantee program, the guarantee debt amount has not been paid by HDB, or if the debt has been certified by the competent Tax Office (D.O.Y.), it has been included in a repayment arrangement that remains in effect at the date of the financing application submission.
They have not been subject to collective insolvency proceedings, nor do they meet the conditions under domestic law to be subject to collective insolvency proceedings upon creditors’ request.
They do not belong to the non-eligible businesses.

Eligible Expenses:

Documentation of loan usage with relevant expense receipts is required, in accordance with the submitted business plan. Eligible expenses must not have been paid before the date of submission of the financing application. The start date of operations must be after the date of submission of the investment project inclusion application under the provisions of Law 4887/2022, as well as after the date of submission of the financing application on the “Know Your Customer (KYC)” platform.

Investment expenses on tangible and intangible assets,

(i) Wage expenses for new positions,
(ii) and/or a combination of these,
(iii) The investment must be maintained in the area where the aid is granted for at least three years in the case of SMEs.

In any case, the Final Recipient provides a financial contribution of at least 25% of the Eligible Expenses through their own resources or external financing, in a form exempt from any public support according to the Development Law and, in any case, in a form that does not contain elements of state aid.

Not permitted:
(a) refinancing/repayment of existing loans or credit lines,
(b) financing of dividend payments or share purchases,
(c) financing of acquisitions and mergers, and
(d) financing of subordinated and mezzanine debt.

Collateral

For long-term loans, the Bank may also require tangible collateral, to the extent justified given the Guarantee and in any case up to 40% of the loan principal. The pre-notation (mortgage) of the primary residence of the business owners or guarantors is not allowed. Personal guarantees are permitted.
For short-term loans, the Bank may, to the extent justified given the Guarantee, take as the sole tangible collateral the assignment of the claim from the Development Law Grant. Personal guarantees are permitted.
Management fees are determined based on the amount of financing and the Bank’s applicable fee schedule.