Subsidized Loans for Companies: How can they be accessed?

Subsidized loans

Subsidized loans

The subsidized loans are aimed at encouraging business investments or facilitating the emergence of new economic realities, making concrete the ideas of entrepreneurs and financiers. This type of financing includes various forms of loans, which differ depending on who is the entity that provides the sum (public or private) and for what purposes it is addressed. Furthermore, there are also subsidized loans for ordinary citizens, which are usually defined as subsidized loans, including some opportunities for mortgages.

Returning to finance for businesses, the facilities are usually provided by public bodies, such as the State, the Region or the European Union, which finance the ideas of entrepreneurs to start new businesses or improve their business. The main benefit concerns the interest rate. The company that receives the loan does not have to negotiate with a bank a fixed or variable rate, exposing itself to any risks that involve the two choices: too much volatility for a variable rate, the risk of paying too much with a fixed rate. The interest rate on a subsidized loan is controlled, that is, it cannot exceed a certain threshold set by the tender notice and is often linked to an official rate established, for example, by the Treasury.

Another tool with which public authorities can intervene to facilitate access to finance for companies is the provision of guarantees. In this case, the State does not provide the loan, but it offers stable guarantees to the bank to which the entrepreneur has turned. To this end, a Central Guarantee Fund is envisaged to reduce the risk on the guaranteed amount up to 1.5 million euros.

However, it is now also the banks, especially the most consolidated in Italy, that advertise subsidized loans, especially to certain categories such as new companies, the so-called start-ups. Usually the bank offers an ‘easy’ loan up to a certain threshold (we assume 100,000 euros) with personalized repayment plans.

Finally, the subsidized loans can be directed to the purchase of new machinery, the development of innovative projects or a change to the working spaces within the company. But other areas of interest are energy efficiency, the internationalization of companies, female and youth entrepreneurship, research and innovation, safety in the workplace and environmental protection.

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