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PR(94)29: Surveillance Authority authorises a guarantee scheme in support of SMEs in Finland


The EFTA Surveillance Authority today authorised a consolidation guarantee scheme. The primary objective of the scheme is to secure the viability of indebted small and medium‑sized enterprises (SMEs). This is done by consolidating a bank credit of an individual SME and by granting a guarantee on the credit.

The scheme is administered by the Finnish Guarantee Board. State guarantees are granted to the bank. as a security for the principal, interest and other payments determined in the terms of the consolidated credit. The guarantee may cover at most 50 % of the bank loan of the SME.

A precondition for issuing the guarantee is that the enterprise, whose credits are to be consolidated, is estimated to be economically viable in the long run. Another precondition is that the bank, agrees to alter the terms of the loan to be consolidated in its entirety by lowering the financing costs of the company. During the consolidation period the bank must grant the SME at least a 5‑year grace period and lower the interest of the credit for the same period of time.

When applying for the guarantee, the bank‑ presents a corporate analysis, based on an organisation plan by the SME, of the company in question in order to demonstrate that the enterprise has the possibilities to operate profitably in the future. Furthermore, the bank presents to the Guarantee Board its evaluation on how, the financing situation of the company shall change as a result of the consolidation arrangement. It shall also disclose the proposed terms of the arrangement, including the lowering of the interest.

The scheme is limited in time covering State guarantees granted on the basis of the applications received by the Finnish Guarantee Board by the end of 1995. The total amount of all outstanding guarantees may not exceed FIM 3,500 million at ariv one time. It is estimated that the average guarantee or amount will be FIM 2-4 million. Fees for the guarantees vary between 0,25 and 3 % of the guaranteed amount.

The Authority states that in promoting SMEs, the scheme facilitates the development of certain economic activities. Having found that the scheme is in line with the EEA provisions on State aid as regards the granting of State guarantees, aid to SMEs and complies with the principles on aid to rescue and restructuring, the Authority has decided to authorise the scheme under Article 61(3)(c) of the EEA Agreement.

For further information please contact Maria Blässar (State Aid and Monopolies Directorate) on tel. 22 66 853.

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