Warsaw, 8th April 2020
POSITION OF THE UNION OF ENTREPRENEURS AND EMPLOYERS
ON THE “FINANCIAL SHIELD FOR COMPANIES”
From the very beginning of the crisis caused by the coronavirus pandemic, the Union of Entrepreneurs and Employers has emphasised the need to rapidly launch a programme to secure the liquidity of Polish companies. A significant number of entities has the ability to operate for a certain time without profits, however, deepened liquidity problems may lead to a real wave of bankruptcies. This would translate into an economic calamity, the loss of hundreds of thousands (if not millions) of jobs, and the years of unprecedented economic growth and development in Poland going to waste. We are glad that an effort was undertaken to introduce a quick and simple tool to support the financial liquidity of companies.
According to the information presented during the Prime Minister’s press conference, Polish companies are to receive as much as PLN 100 billion (4.5% of GDP) of direct financing within a very short time, of which as much as PLN 75 billion will be allocated to the SME sector. The limit of funds earmarked for a single company depends on its size category – micro-companies can get a maximum of PLN 324,000, while small and medium ones approximately up to PLN 3.5 million. Aid for companies from the SME sector is to take the form of simple subsidies paid through banks. Meanwhile, large companies can obtain loans or bonds worth up to PLN 1 billion.
According to the official communiqués, the allocation mechanism is to be simplified to the highest possible extent and based on statements. This declaration is all the more pleasing, because the liquidity support measures proposed so far as part of the ‘anti-crisis shield’ were unfortunately encapsulated with too complicated formal procedures and requirements. Declarations on the simplicity of introduced solutions seem to be confirmed by a very transparent catalogue of criteria for providing support. The prerequisite is that revenues fall by at least 25% compared to the previous month or the corresponding month of the previous year. Furthermore, this financial aid is to be granted to those entities which were banned from operating due to sanitary restrictions. In the case of large entities, financing is to be granted on more individualised terms, under which, for example, the payment of taxes in Poland should also be taken into account.
The support scheme also has a simple structure in terms of organisation. Financing for the SME sector is to be distributed through commercial banks in the most digitised way possible. Large companies are to be attended to directly by the Polish Development Fund. Financing will be granted on the basis of simple collateral, e.g. promissory note, and the funds may be allocated to cover the costs of conducting business, in particular employee remuneration.
According to the mechanism presented, part of the support provided is to be non-refundable. Micro-enterprises can count on the write-off of 75% of their receivables if they continue to operate and maintain average employment within a year of obtaining funds. In the case of small and medium-sized enterprises, a 50% write-off depends on these conditions, and an additional 25% may result from the loss on sales incurred by the company.
As already highlighted, large companies are to be subject to a different financing regime: they can count on loans on preferential terms, partly non-refundable, bonds or investment financing in the form of taking up shares or stocks.
The presented package of financial support for companies seems to be adequate to the level of threat resulting from the coronavirus pandemic. Companies impatiently awaited a similar project, and the Union of Entrepreneurs and Employers in almost every subsequent publication stressed the need to quickly introduce such a tool. We are glad that our voice has been heard. We trust that with this bold move the government has a chance to save many jobs and companies. Perhaps this will allow Poland to go through the crisis with dry feet (as the Polish saying goes), which would undoubtedly be a great achievement.
Fot. _Alicja_ / pixabay.com