Banca Comerciala Romana (BCR) and the Romanian Investment and Development Bank (BID) are expanding their partnership to finance small and medium-sized enterprises (SMEs) by introducing revolving loans, euro-denominated financing and guarantees covering up to 80% of investment loans, according to a press release issued by BCR.
The BID guarantee ceiling allocated to BCR stands at 710 million lei, enabling more than 1 billion lei in financing for SMEs.
According to the press release, the new agreement between the two institutions introduces revolving working capital loans, allowing entrepreneurs to use a BID-guaranteed credit facility for an initial period of up to 24 months.
SMEs will be able to draw on the available funds as needed, repay them and borrow again. The credit facility can operate in this way for up to four years, after which any outstanding amount can be converted into a conventional loan repayable in monthly instalments. The total financing period can extend to ten years.
Another change allows eligible companies, particularly those receiving revenues in euros, such as exporters, to obtain euro-denominated financing.
The BID guarantee for such loans will be set in lei at the exchange rate applicable on the date the contract is signed and will remain unchanged throughout the loan period.
At least 40% of BID guarantees will also be reserved for investment loans, for which guarantee coverage can reach 70%. For example, BID may guarantee up to 700,000 lei of a 1 million lei investment loan.
For loans intended to finance operating expenses, guarantees will cover up to 60% of the loan amount in lei and up to 55% for euro-denominated financing.
According to the cited source, guarantee coverage for investment loans may be increased by ten percentage points, to 80%, for women-owned or women-led businesses, start-ups and innovative companies.
The same facility will be available to SMEs with a registered office or business premises in counties covered by the EastInvest Facility programme, namely Suceava, Botosani, Iasi, Vaslui, Galati, Tulcea, Constanta, Maramures and Satu Mare.
The expanded partnership also provides for lower financing costs for entrepreneurs, with the benefits of BID guarantees to be passed on in full to customers.
As a result, the total cost of financing will be reduced by at least 0.30 percentage points for each loan guaranteed under the scheme.
The BCR-BID partnership aims to improve SMEs' access to financing through a loan portfolio guarantee mechanism.
