On 27 April 2020, the European Commission ("EC") approved the Financial Shield of the Polish Development Fund for Small and Medium-sized Enterprises ("PFR Financial Shield for SMEs", "Programme") and Micro-enterprises.
From April 29, 2020, it is possible to submit applications for financial subsidies under the Program through the electronic banking of banks cooperating with PFR in the implementation of the Program.
The Polish Development Fund shield program is aimed at:
- micro-enterprises employing from 1 to 9 employees (excluding the owner) as at 31 December 2019, whose annual turnover or balance sheet total does not exceed EUR 2 million,
- small and medium-sized enterprises employing up to 249 employees, whose annual turnover does not exceed EUR 50 million or whose balance sheet total does not exceed EUR 43 million.
The subsidy will be available to companies that experienced a decline in revenue of at least 25% in any month after February 1 this year compared to the previous month or the same month last year due to the coronavirus pandemic.
The maximum amount of subsidy for micro-enterprises depends on the scale of the decline in revenue and the number of employees and can amount to up to PLN 324,000 (PLN 70,000-90,000 on average), and 75% of its value may be non-refundable; 25% of the value is non-refundable provided that the business continues operating within 12 months of its granting.
An additional 50% of the subsidy is non-repayable, depending on the level of average employment maintained over a 12-month period. In the event of a reduction in employment, the percentage of subsidy reimbursement by the entrepreneur is correspondingly higher, providing a strong incentive for beneficiaries to maintain their jobs.
After 12 months, repayment of the remaining subsidy begins in installments, spread over 24 months.
For SMEs, the subsidy amount, which represents 4, 6, or 8% of annual sales depending on the scale of the sales decline, can reach a maximum of PLN 3.5 million (PLN 1.9 million on average). 75% of the financial subsidy may be non-refundable, including 25% subject to continued operations, 25% based on the company's sales loss, and an additional 25% based on maintaining average employment over a 12-month period.
To efficiently complete the application, the company representative should prepare data such as the number of employees (including those under civil law contracts) in full-time equivalents and the amount of revenue in given months, which will allow the company to be classified as a micro or small and medium-sized enterprise, as well as to calculate the amount of subsidy due.
Representatives of companies that are clients of a given bank will be able to submit applications for financing in the form of partially non-repayable subsidies. The application will be based on the entrepreneur's declarations and will be automatically verified by the Polish Development Fund (PFR) based on data from banks (identification, including the Tax Identification Number), the Social Insurance Institution (ZUS) (employment), and the Ministry of Finance (including sales revenue for the previous financial year for SMEs).
Companies that submit an application or receive a subsidy under the PFR financial shield do not incur any costs, e.g. bank commission or application processing fees.
In order to benefit from the shield, the beneficiary must not be in liquidation or bankruptcy.
The beneficiary must have tax residence or have settled taxes in Poland for 2 years. The beneficial owner, according to the CRBR register, cannot be based in a tax haven.
The beneficiary must be running a business as of December 31, 2019 and on the date of submission of the application.
Beneficiaries may combine various forms and types of support received by a given entrepreneur from public funds. Crisis aid provided by the Polish Development Fund (PFR) to microenterprises and SMEs may be cumulated with other aid from this section, up to a total limit of EUR 800,000. Assistance for BGK (Bank Gospodarstwa Krajowego) and de minimis aid may also be used in combination.
