A guarantee is a financial instrument that demonstrates high efficiency both during economic growth and in the face of slump and crisis. This has been confirmed over the years of operation of BGK’s guarantees in the Polish market.

The Bank provides a particularly broad range of loan repayment guarantees for small and medium-sized enterprises (SMEs). As part of the comprehensive guarantee offer, guarantees are also available for large companies and individuals.

Thanks to the government’s activities undertaken in cooperation with BGK, resulting in the establishment of the National Guarantee Fund at BGK, guarantees for SMEs have become a fixed element of the system of financing Polish entrepreneurs and a form of support well recognised by them.

BGK’s guarantees for SMEs are provided under the “Supporting Entrepreneurship through BGK Sureties and Guarantees” government programme. The main objective of the programme is to ensure the widest possible use of guarantees and sureties. Apart from the above programme, in 2021 BGK also implemented another government guarantee scheme – “Clean Air”, aimed at reducing or preventing the emission of dust and other pollutants into the atmosphere by single-family buildings. The programme makes it possible to provide support in the form of guarantees to individuals who want to use a loan backed by a BGK guarantee to finance thermomodernisation of buildings and replacement of an inefficient heat source with a modern one that meets the highest emission standards.

BGK guarantees take the form of so-called portfolio guarantees securing financial transactions granted by banks, factors and lessors. The form of distribution of guarantees through financial institutions and the network of their branches across the country has proved to be the most effective, as it ensured wide access to BGK’s guarantees and the effectiveness of provisioning for the risk of financing and implementation of projects designed to promote business growth, as well as other projects related to sustainable development which are important for Poland.

BGK’s guarantee offer in 2021 included the following instruments:

  • de minimis guarantees,
  • COSME guarantees,
  • Biznesmax guarantees,
  • guarantees for the agricultural sector,
  • liquidity guarantees,
  • guarantees for repayment of factoring limits,
  • lease and lease loan guarantees,
  • Clean Air guarantees.

The COVID-19 pandemic continued for yet another year, which was a time of challenge for enterprises and the role of BGK’s guarantees in mitigating the effects of the crisis caused by the pandemic. The special conditions faced by enterprises led BGK to continue its activities to extend favourable terms in the area of guarantees that had already been introduced or to introduce new solutions. In 2021, the Liquidity Guarantee Fund (LG Fund) was operated, thanks to which it was possible to provide liquidity guarantees for loan repayment and guarantees for repayment of factoring limit – instruments which were created primarily to maintain the liquidity of enterprises. In addition, guarantees securing business lease transactions and Clean Air guarantees for natural persons interested in financing the replacement of heat source or thermomodernisation of a single-family house were also launched in 2021.

De minimis guarantees

The guarantee has been available for the longest time in the Polish market (since March 2013) and is an excellent example of effective, real support for enterprises.

As in 2020, in 2021 the de minimis guarantee was a key instrument of support in obtaining financing during the pandemic, addressed to SMEs.

For the duration of active measures undertaken to counteract the consequences of the pandemic, i.e. currently until 30 June 2022, the de minimis guarantee is granted under the following special terms:

  • increased maximum collateral from 60% to 80% of the loan amount,
  • waiver of commission for granting a guarantee, which was normally 0.5%,
  • extension of the maximum term of the guarantee for repayment of a working capital facility from 27 to 75 months, and in the case of an investment loan – to 120 months,
  • maximum guarantee amount increased from PLN 3.5 million to EUR 1.5 million for guarantees of up to five years and EUR 750,000 for guarantees of more than five years.

As a result of the change of parameters, but above all due to the recognition of the de minimis guarantee as an effective support instrument, record-high sales of the de minimis guarantees were recorded. In 2021, 91,705 guarantees were granted for PLN 34.17 billion, which contributed to the amount of provided financing of PLN 46.24 billion. As at 31 December 2021, since the beginning of the de minimis guarantee scheme 478,210 guarantees worth more than PLN 124.31 billion had been granted.

The positive effects of the de minimis guarantee scheme are confirmed by annual surveys based on information provided by enterprises. The results of the survey confirm* that de minimis guarantees enable enterprises to take out loans – 48% of the surveyed enterprises stated that without the guarantee they would not have been able to receive any loan, and according to 68% of them the terms of the obtained loan would have been worse. Moreover, the funding obtained thanks to the guarantee helped stabilise their financial situation (76.7%), maintain or increase employment (it is estimated that 303,700 jobs were preserved and 146,000 were created), and generate the resources needed for development, consolidation of the market position (25.3% of respondents) and exploiting use the potential of market advantage. As many as 72% of respondents stated that financing guaranteed under the scheme helped them survive the crisis connected with the pandemic to a very large or large extent.

*Outcomes of De Minimis and COSME Guarantee Schemes, Bank Gospodarstwa Krajowego, Department of Research and Analysis, November 2021.

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COSME guarantees

The COSME guarantees with the counter-guarantee of the European Investment Fund are a complementary solution to guarantees using state aid. The guarantees were granted on arm’s length terms, without affecting state aid limits, which is particularly important as enterprises widely use various forms of offered support based on state aid. COSME guarantees are provided under the EU COSME Programme and the European Fund for Strategic Investment (EFSI) established under the Investment Plan for Europe. The EFSI is intended to support financing and implementation of production investments in the European Union and to provide better access to finance. BGK was the first bank in Europe to sign a COSME agreement (2015) with the EIF under the European Fund for Strategic Investment (the so-called Juncker Plan).

COSME guarantees were provided with the formal requirements that an enterprise must meet to obtain funding secured by this guarantee reduced to a minimum, i.e. apart from the fact that it is not necessary to verify the utilisation of aid limits as referred to above, there are no sectoral limits, namely guarantees are offered regardless of the type of the conducted business activity (except for restricted sectors in accordance with EU and national legislation). The COSME guarantee also eliminates the need to create any security on assets of the enterprise.

All of this mad this guarantee very popular among enterprises. From 6 April 2020 until 31 December 2021, more favourable terms of guarantees for the repayment of loans to finance day-to-day activities of SMEs were in effect. BGK’s commission for guarantee was reduced from 1% to 0.7% and the guarantee term was extended from 27 to 39 months.

In 2021, 4,237 guarantees were granted for PLN 736.48 million, which contributed to the amount of provided financing of PLN 920.59 million. As at 31 December 2021, 35,682 guarantees worth more than PLN 6.15 billion had been granted since the beginning of the COSME guarantee scheme.

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Biznesmax guarantees

The guarantee for innovative enterprises and green projects is a specific offer focusing on the growth of enterprises, on the quality of their services and products, technological improvements that facilitate the achievement of objectives, and building environmental and climate change awareness by facilitating the acquisition of funding needed to finalise related projects. This product which is unique on a European scale requires ambitious solutions, which is why the Biznesmax guarantee stands out from other guarantees. Apart from securing a loan, the enterprise that uses the guaranteed loan correctly may receive a subsidy that reimburses the interest paid.

This guarantee has attracted much interest from enterprises. Undoubtedly, the increased interest in the guarantee resulted in stronger demand for it, which contributed to a rapid growth rate of guarantee sales in the last year. Out of 1,305 guarantees provided cumulatively as at 31 December 2021, totalling PLN 2.6 billion, as many as 812 guarantees worth PLN 1.6 billion were issued in 2021.

This also resulted from continuation in 2021 of changes in the rules of granting the Biznesmax guarantee implemented for the period of special measures counteracting the effects of COVID-19. The changes introduced in 2020 focus on facilitating access to financing of ongoing activities. It was made possible to apply a guarantee to working capital facilities, without any requirements related to the project carried out or a catalogue of eligible costs. The interest subsidy system also covered revolving and non-revolving working capital facilities.

The main outcomes of the Biznesmax guarantee scheme resulting from the completed evaluation* are as follows:

  • 36% of the surveyed companies that obtained a loan with a Biznesmax guarantee in the period from August 2020 to July 2021 would not have received funding without this support or would have received it on worse terms;
  • 47% of entrepreneurs from the surveyed companies that obtained a loan with a Biznesmax guarantee state that this support helped keep the business afloat during the crisis caused by the COVID-19 pandemic;
  • 33% of beneficiaries of the Biznesmax guarantee that received a subsidy in the 12 months before the survey increased employment in their companies;
  • 47% of the companies surveyed maintained liquidity thanks to the received support.

*Outcomes of the “Biznesmax subsidised guarantee scheme” in 2021, BGK.

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Creative Europe guarantees

This is another guarantee with the counter-guarantee of the European Investment Fund. It was based on the European Fund for Strategic Investments (EFSI) and was intended to support entities from the creative and cultural sectors. The guarantee was introduced to BGK’s offer in 2019 due to identified high difficulties in obtaining debt financing for these sectors. The main reason that was identified was the specific nature of their business, which is often unique, prototype and innovative, while their asset structure is characterised by a large share of intangible assets. From the point of view of lending banks, such assets do not constitute attractive collateral as they are unique and cannot be readily disposed of compared to typical tangible collateral. In addition, creative and cultural actors have irregular sources of income and their operations are based on activities whose value is difficult to assess. The lack of external funding limits their development, innovation and competitiveness. The Creative Europe guarantee was a response to the unavailability of adequate collateral and a clear message that BGK also takes up such difficult challenges as supporting demanding niche industries by establishing a dedicated support instrument. BGK breaks barriers and stereotypes among both financing banks, which avoid non-standard transactions, and enterprises which are not fluent in financial matters, but can boast of creativity and provide the public with intangible services. As a niche product, this guarantee was not used on a mass scale, despite numerous activities undertaken by BGK, such as the provision of training to banks, extension of the range of business activities according to the Polish Classification of Business Activity that are eligible to receive the guarantee, or full waiver of the guarantee fee.

Guarantees for the agricultural sector from the Agricultural Guarantee Fund (AGF)

The AGF guarantee supports agricultural holdings and agri-food processing establishments that fall under the SME definition. The AGF is the first BGK guarantee fund in the Polish market available for the entire agricultural sector. Beneficiaries of the guarantee also include producers in the primary agricultural production sector and processors of, or entities marketing, both agricultural and non-agricultural products indirectly linked to an agricultural product. The initiative is implemented as part of the Rural Development Programme (RDP).

The guarantee is also the first repayable instrument from the RDP used on such a large scale. What’s important, obtaining a loan with BGK’s repayment guarantee is easier than obtaining a grant under the Rural Development Programme. The decision-making process is also faster. The call for applications is not limited in time and entities may apply for the guarantee on a continuous basis. There is no need to carry out a project evaluation. In addition, the repayment guarantee covers loans relating to all areas of agricultural production, irrespective of the economic size of the agricultural holdings. Promoting the development of the agricultural sector is a good example of the Bank’s care for balancing opportunities between business sectors and rural areas relative to other areas. At the same time, the repayable nature of the instrument breaks barriers in the agricultural sector regarding financing based on external capital, and not only on own funds or grants. On the other hand, institutions financing the activities of agricultural holdings, with such a high level of good and liquid collateral, are more willing to invest their funds in projects related to their activities. For the duration of the COVID-19 pandemic, additional facilities and improvements were introduced to the terms of providing guarantees for the agricultural sector (PGF-AGF). The changes made it possible to provide the guarantee for working capital facilities financing day-to-day operations, which are not related to a project carried out by the borrower under the Rural Development Programme, with a maximum guarantee term of 39 months (revolving credit facilities) and 51 months (non-revolving credit facilities). In addition, the facilities were subject to an interest subsidy. The interest subsidy is effective for up to 12 months counted from the date of first drawdown under the facility covered b the AGF guarantee and is paid at the rate of 2 percentage points per annum. Out of PLN 749 million of AGF guarantees issued as at 31 December 2021, 65% (PLN 483 million) were provided in 2021 alone. In total, as at 31 December 2020 4,762 guarantees had been provided since the beginning of the AGF guarantee scheme.

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Liquidity guarantees from the Liquidity Guarantee Fund (LG Fund)

The liquidity guarantee was created in 2020 with medium-sized and large enterprises in mind. This way, a completely new segment of final beneficiaries, i.e. large companies, was included in BGK’s portfolio guarantee system. The guarantee is a proof of a very successful partnership cooperation within BGK and with external stakeholders, including the Ministry of Finance and the Office for Competition and Consumer Protection (UOKiK). The objective of liquidity guarantees for loan repayment is to secure financial liquidity of Polish companies and, as a result, maintain their market presence and employment. The guarantee may cover both new and renewed working capital facilities. The guarantee may be applied to credit facilities for which agreements were executed not earlier than on 1 March 2020 and may cover up to 80% of the principal. The maximum guarantee amount may not exceed PLN 200 million and the total amount of guaranteed loans granted to the borrower may not be higher than PLN 250 million. The guarantee term may be up to 27 months, but not longer than the loan term extended by no more than three months. To increase the availability of the liquidity guarantee, it was made possible apply the guarantee to foreign currency loans. As at 31 December 2021, 2,747 guarantees were issued for the total amount of PLN 26 billion, which was a significant achievement, bringing tangible benefits for the economy.

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Guarantees for repayment of factoring limit

In September 2020, the Bank began offering guarantees of repayment of factoring limits, which were granted to enterprises falling within the SME definition or to large companies.

Once again, BGK proved to be the leader among other financial institutions in the European Union and a precursor of solutions. This product, with no counterpart in the EU, was the first factoring guarantee product notified by the European Commission.

The guarantee may cover factoring with recourse and reverse factoring. The guarantee may be applied to factoring limits for which agreements were executed not earlier than on 1 March 2020

and may cover up to 80% of the factoring limit. The maximum guarantee amount may not exceed PLN 200 million and the total amount of guaranteed factoring limits granted to the seller of receivables may not be higher than PLN 250 million.

The guarantee term may be up to 27 months, but not longer than the term of the factoring limit extended by no more than three months.

As at 31 December 2021, 788 guarantees for an aggregate of PLN 3.96 billion were provided.

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Guarantees for lease agreements/lease loans

In 2021, BGK introduced a new guarantee product for SMEs, i.e. a guarantee of repayment of a finance lease transaction and loans granted by leasing companies. The portfolio guarantee for lease transactions supplements the existing offer of BGK’s portfolio guarantees related to fighting the consequences of the COVID-19 pandemic. It addresses the expectations of enterprises that face difficulties in obtaining financing from leasing companies. The new BGK guarantee can cover up to 80% of the lease amount or lease loan without interest and costs related to their granting. BGK’s guarantee is secured by a counter-guarantee of the European Investment Fund using funds from the Pan-European Guarantee Fund (EGF), which was created from the resources provided by the majority of EU Member States. The Fund is separate initiative, independent of the EU budget, of EU Member States, which are the shareholders of the European Investment Bank. Poland acceded to the Fund, expressing its solidarity with other Member States in the fight against the consequences of the pandemic and making its financial contribution that helps other Member States wishing to use the products offered thanks to the EGF. With respect to this guarantee BGK also became a precursor, as the first development bank that used the funds of the Pan-European Guarantee Fund in the counter-guarantee formula to offer support for business. As at the end of 2021, 1,237 guarantees were granted totalling nearly PLN 211 million.

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Clean Air guarantees

In 2021, BGK also extended the offer of guarantees granted as portfolio guarantee facilities by adding the Clean Air guarantee. The guarantee is provided in the form of a portfolio guarantee facility based on the Clean Air government guarantee scheme using the resources of the Ecological Surety and Guarantee Fund. It is intended for natural persons to secure a loan taken out to finance the replacement of a heat source or thermomodernisation of a single-family house or a unit separated in a single-family building with a separate land and mortgage register. Thanks to the guarantee the borrower can receive a loan with terms that are more favourable than standard terms as well as a subsidy for partial repayment of the loan under the priority programme “Clean Air” implemented by the National Fund for Environmental Protection and Water Management. The guarantee makes it possible to secure even up to 80% of the loan principal at no cost. As at the end of 2021, 204 guarantees were granted totalling nearly PLN 8 million.

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