Financial Shield of the Polish Development Fund – the subsidy for micro, small and medium-sized enterprises
June 2, 2020
The Financial Shield is another government program in Poland aimed at supporting companies in the fight to maintain liquidity. The program is run by the Polish Development Fund (PFR). It has been intended for micro, small and medium-sized enterprises. Companies may apply for a subsidy of which up to 75% may be redeemed after fulfilling the condition of maintaining average employment and conducting business for a period of 12 months. It has been created for entities whose turnover decreased by at least 25% after February 1, 2020. The decrease must be compared to the previous month or to the same month last year.
Subsidy for mico-enterprises
Maximum subsidy for micro-enterprises amounts to PLN 324,000 (approx. PLN 70,000 – 90,000) for 3 years.
The most important conditions to be met:
- From 1 to 9 employees, excluding the owner
- Annual turnover or balance sheet total less than EUR 2 million
Subsidy for small and medium-sized enterprises
Maximum subsidy for small and medium-sized enterprises amounts to PLN 3.5 million (PLN 1.9 million on average) for 3 years.
The most important conditions to be met:
- Employment of up to 249 employees and the business cannot be a micro-enterprise
- Annual turnover less than EUR 50 million or balance sheet total less than EUR 43 million
Other conditions to be met
- Bankruptcy, restructuring or liquidation proceedings have not been opened in relation to the company.
- The real beneficiary who applies for support under the Program must have a tax residence on the territory of the Republic of Poland and have settled taxes for the last 2 financial years (if applicable) on the territory of the Republic of Poland. There can be an exception for this rule if the Beneficiary of the Program undertakes to transfer his tax residence to the territory of the Republic of Poland within 9 months of granting the subsidy.
- The entrepreneur pursued business activity as at December 31, 2019.
- As at December 31, 2019 or as at the date of the subsidy is granted, the entrepreneur was not in arrears with payments of taxes and social security contributions. Payment in installments as well as deferment of payment is not considered arrears.
The PDF subsidy may be canceled at the end of the 12th calendar month (from the date of payment) up to 75% of the amount paid, provided that:
Micro-enterprises:
- 25% if the business activity will be continued within 12 months of granting the loan;
- 50% depending on the level of keeping average employment over 12 months. When employment decreases, the subsidy return percentage is correspondingly higher. This is a strong incentive for beneficiaries to maintain jobs.
Small and medium-sized enterprises:
- 25% on condition of continuing the business;
- 25% depending on the company’s loss on sales.
Repayment of subsidy
The amount to be paid must be paid back in 24 installments, spread evenly over 24 months. Repayment starts in the 13th calendar month and is counted from the first (full) calendar month that follows the date of granting the financial aid. The subsidy may be intended to cover costs of ongoing business operations. It is not possible to allocate the subsidy for the takeover or acquisition, directly or indirectly, of another entrepreneur. Loans can be repaid (early) up to a maximum of 25% of the loan value. A settlement prohibition with related entities has been introduced. Money from the subsidy may not be used for payments to the owner, to persons or entities related to the owner of the enterprise. Applications are submitted directly to the bank where the entrepreneur keeps a company account.
Banks
Here you will find an updated list of banks where you can file an application for the subsidy:
https://pfrsa.pl/tarcza-finansowa-pfr/tarcza-finansowa-pfr-dla-mmsp.html#banki
How can VGD assist you?
VGD provides support in implementing solutions offered in the anti-crisis shield – a package of law for entrepreneurs in Poland. Some applications may be complicated. Therefore, feel free to contact us to discuss possible options for your business and to receive assistance in filling out the request for subsidy.
Please contact us: biuro@vgd.eu.
Author: Ewa Kulesza