Anti-crisis program in support of businesses

In May 2020, the Council of Ministers approved and assigned BDB with the implementation of the "Program for liquidity support through portfolio guarantees for micro and SMEs affected by the declared emergency and COVID-19 outbreak" (hereinafter referred to as the Program).

The program was updated by a new resolution of the Council of Ministers adopted on November 4th, 2020 and March 5th,2021.

The changes are implemented in the work of the partner banks soon. Following the changes, the companies will be able to apply under the updated framework terms and conditions as described below.

The program goal is to have BDB provide guarantees in favor of commercial banks (see list below), which, in turn, will form portfolios of loans to micro, SMEs and large enterprises affected by the COVID-19 outbreak, to ensure the liquidity of borrowers, despite their difficult situation, require a reduced collateral, from 0% to 50% of the loan amount, and reduce the applicable annual interest rate by 0.8%.

The Guarantee Bank (BDB) provides guarantee coverage of 80% of the principal of each loan under the program.

This government measure has been approved by the European Commission (EC) and is a state aid, which must also meet the conditions set out in the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak. (EC State Aid Temporary Framework ).

The program is open to all sectors and is implemented by BDB’s partner banks all over the country.

Eligible borrowers: micro, small and medium-sized enterprises within the meaning of the Small and Medium-sized Enterprises Act (SMEA), as well as large enterprises that are business companies within the meaning of the Companies Act, which suffer from the negative economic effects of COVID-19.

As provided for by the said SMEA, "enterprise" is any natural person or legal entity that carries out economic activity, regardless of its ownership, legal and organizational form (§1, subparagraph 1 of the Additional Provision to SMEA).

Large enterprises are companies of over 250 employees and an annual turnover of over BGN 97.5 MM, or an asset value of over BGN 84 MM. Associations and companies under the Obligations and Contracts Act are not eligible for financing.

The guarantees provided by BDB may include existing loans already provided by banks, as well as new working capital and investment financing.


Application criteria:

1. Applicants must be micro, small or medium-sized enterprises as defined in SMEA, or large businesses, whose number of employees, assets and/or turnover exceed the number of employees, assets and/or turnover provided for by SMEA;

2. That on December 31st, 2019 they were not in a difficult situation as established using preset standard criteria. The recent amendments to the program introduce a relief from the State Aid Temporary Framework for micro and small enterprises. They should not be the subject of insolvency proceedings under their national law and should not have received rescue aid or restructuring aid (meaning State aid for rescue or restructuring). Furthermore, if the BDB guarantee includes existing loans, they must not have been non-performing loans and the borrower must not have been in default for more than 90 days in 2019. For existing loans, the borrower must have submitted to the partner commercial bank forecast estimates and a forecast plan for resumption of its activity, which does not require any strictly defined form and details;

3. Financing and guarantees can be enjoyed by enterprises, which have encountered difficulties or have been in straitened circumstances after December 31st, 2019 due to the COVID-19 outbreak. The borrower itself identifies the difficulties by just describing one of the following reasons that caused them:

3.1. Decrease in turnover after the first quarter of 2020 compared to the same period in 2019 (based on financial statements and records of the company);

3.2. Receivables from customers that have not been received/amounts not paid to suppliers, after March 1st, 2020 (based on financial statements and records of the company);

3.3. Terminated deliveries from import, necessary for the operations of the enterprise - after January 1st, 2020, canceled export contracts (based on documents submitted by the company);

3.4. Cases of sick and self-isolated employees, total reduction in the number of employees, closed production facilities, premises and offices (based on documents submitted by the company);

3.5. Other circumstances evidencing the difficulties experienced by the enterprises due to COVID-19, according to the methodology adopted by the commercial bank, which is provided to BDB.

4. Since the funding covered by the guarantee under the program is state aid, borrowers are prohibited from financing the same expenditure using both a loan under the program and any other state/de minimis aid. (‘same expenditure’ means, for example, payment of a specific invoice dated November 30, 2020 or payment of rent for a specific office for the month of December 2020, or payment of salaries of specific employees, for a specific month.) If for the specific expenditure the client uses state/de minimis aid, the client cannot use the loan to cover the same expenditure (prohibition of double financing).

5. The borrower must not have breached the state aid rules and been entered in the Deggendorf Register specifically created for this purpose.

6. If a borrower, or a related person thereof, has benefited or is currently benefiting from any other state/de minimis aid, for the same type of expenditure as the expenditure the borrower seeks funding for in the form of a loan under the program (e.g. total salary costs, total rental costs, total costs for the maintenance of facilities), the borrower must state this to the commercial bank in the statement form required by the program and avoid double financing as defined in paragraph 4 above.


Loan requirements:

1. The coverage of the guarantees provided by BDB will be able to include both existing loans already provided by the banks and new loans in the form of working capital and investment funding.

2. Measures for changing and easing the repayment schemes may be applied to existing loans, including renegotiating loan terms.

3. Since the funding covered by the guarantee constitutes state aid, the loan amount is determined according to the funding thresholds set by the EC in the State Aid Temporary Framework and at a maximum amount of exposure under the program to a borrower and related parties (upon implementation of the changes). ) of BGN 1 MM for SMEs and of up to BGN 2 MM for a large enterprise.

4. Providing funding under the program to refinance old loans is prohibited;

5. Loans can be for both working capital and investment needs.

6. Funded costs must be directly linked to the business activities of the enterprise.

7. The loans shall have no minimum or maximum duration limit, but the guarantee provided by BDB will be for a duration of 6 years.

8. The commercial bank may provide borrowers with grace periods for payment as follows:

8.1. Up to 6 months for existing loans (for principal up to 6 months, for interest up to 3 months);

8.2. Up to 36 months for principal/interest for newly granted loans;

9. Final date to add loans to the guaranteed portfolio: December 31, 2021.

10. Final date to apply for funding under the program: December 20, 2021.

11. The interest conditions shall be determined according to the rules of the partner banks and they will reduce their standard interest rate by 0.8% before providing the funding;

12. Because of the payment guarantee provided by BDB for 80% of the loan principals, the banks shall reduce their collateral requirements by 50% and accept security in rem of 0% to 50% of the funding amount from the borrowers.

13. Borrowers must pay to BDB a guarantee fee in such amount as determined by the EC in the applicable State Aid Temporary Framework.


In accordance with the Commission Recommendation of 14.07.2020 no financial support (guarantee) can be granted to companies with links to countries that are on the EU's list of non-cooperative tax jurisdictions. The same restriction applies to companies/individuals who have been convicted of serious financial crimes, such as, inter alia, financial fraud, corruption, non-payment of tax and social security liabilities.

No credit or financial institutions can be funded under the program, because they are supported through other statutory mechanism than through the Temporary Framework.


BDB’s partner banks that provide funding:

  • Bulgarian-American Credit Bank

  • Investbank

  • Postbank

  • Unicredit Bulbank

  • DSK Bank

  • First Investment Bank

  • Allianz Bank 

  • United Bulgarian Bank

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