04.01.2022 BDB provides BGN 60 million in a new programme to support tourism
Funds are earmarked for micro, small and medium-sized enterprises in Accommodation and Food & Beverage sectors, which are among the most affected by the COVID crisis
The Bulgarian Development Bank will provide direct funding to micro, small and medium-sized enterprises in the Accommodation and Food & Beverage sectors of the hospitality industry affected by the pandemic. Many of them are experiencing serious financial difficulties and the risk of bankruptcy during the COVID crisis and do not have easing of bank lending conditions due to high sector risk.
To provide them with greater access to liquidity in this difficult situation, BDB is establishing a new program, "Support for Tourism", which will help hotel and restaurant owners and operators, including start-ups, meet their needs, deal with arrears, and ease current payments to financial institutions.
The programme is worth BGN 60 million and the bank will offer two products, "Liquidity Assistance for Restaurant Businesses" and "Liquidity Assistance for Hotel Businesses". The advantage of the new conditions is that they also provide access to financing to companies in arrears of up to 90 days according to the Central Credit Register (up to 5% of the total portfolio) and up to 60 days (up to 45% of the total portfolio) by refinancing their liabilities. Refinanced loans can be deferred for up to 2 years, easing the repayment burden.
Under the Tourism Support Programme, BDB will provide credit facilities, overdraft and standard working capital loans to hotel and restaurant businesses that have not ceased operations in 2020 and 2021. The maximum amount of funding is determined by the size of the company and the type of product; BGN 500,000 for businesses of up to 49 employees (or 20% of 2019 net sales) and BGN 750,000 for businesses of 50 to 249 employees (15% of 2019 net sales). The maximum overdraft is BGN 250,000.
The new financing program also offers an extended term for the standard working capital loan, 48 months. There is also a minimum principal collateral requirement. The grace period is 18 months for hotels and 12 months for restaurants.
Supporting distressed micro, small and medium tourism businesses is part of the BDB Group's updated strategy for the period 2021-2023. It affirms the Bank's priorities for faster recovery of SMEs, accelerating economic growth and job creation after the COVID-19 crisis.
