We already know a number of solutions proposed as part of the Anti-Crisis Shield for Polish entrepreneurs, adopted in the Acts of March 2, 2020, March 31, 2020 and April 16, 2020. Further solutions for entrepreneurs are announced – as part of the so-called Shield 3.0 and 4.0.

Of the solutions already in force, those that mean the inflow of “hard” cash into entrepreneurs’ pockets or reduction of real expenses are the most popular. These include co-financing of employee remuneration costs, exemption from the payment of ZUS contributions, the payment of so-called parking lot, micro loans. Nevertheless, this assistance is generally a drop in the ocean of financial needs of entrepreneurs affected by the situation caused by COVID-19.

Therefore, entrepreneurs most often use co-financing granted under the Polish Development Fund (PFR) program, which offers partially non-returnable co-financing for those entrepreneurs who meet certain conditions.

What can entrepreneurs expect in terms of non-returnable or partially repayable subsidies? Below is a brief overview of the PFR program and other available solutions.

I. Subsidies from the Polish Development Fund (PFR)

The PFR assistance program is directed primarily at protecting jobs. For this reason, it can be used by those who employ at least one person under a contract of employment.

A condition for using the aid is a demonstration of a decrease in revenue, caused by COVID-19, of at least 25%, comparing two monthly periods. The greater the level of decline, the more funding is eligible.

The PFR program is notified by the European Commission (although it is still awaiting final confirmation in the scope of assistance for large entrepreneurs) and therefore some of the parameters related to entrepreneurs are subject to verification based on Commission Regulation EC No. 651/2014 of 17 June 2014 recognizing certain types of aid compatible with the internal market in application of Art. 107 and 108 of the Treaty (Official Journal of the EU L 187 of 26.06.2014), and more specifically – Annex I to this Regulation.

The support is intended for three groups of entrepreneurs who have different rules for granting co-financing: for micro-entrepreneurs, SMEs and large entrepreneurs. The pool of funds is PLN 100 billion, of which PLN 25 billion is intended for micro-entrepreneurs and as much as PLN 50 billion for SMEs.

Entrepreneurs who have their registered office or tax residence in the countries belonging to the European Economic Area are entitled to help. In addition, their actual beneficiary – within the meaning of the Counter-Money-Laundering Act – cannot have a registered office or residence in a tax haven (and if he has, he should undertake to transfer it to the EEA within 9 months of obtaining financing).

Co-financing should be spent on business-related costs, but may not be spent on any type of payment to the owner or related entities.

For whom? microentrepreneurs

What amount? Up to PLN 324 thousand

The subsidy received by the microenterprise may be redeemed up to 75% after expiry of 12 calendar months, from the date of subsidy receipt, on the following principles:

• 25% of the value of the subsidy is non-repayable provided that operations are continued within 12 months of its granting
• an additional 50% of subsidies are non-returnable depending on the level of maintaining average employment over a 12-month period. In the case of employment reduction, the percentage of subsidy return is higher, which is supposed to be an incentive for beneficiaries to maintain jobs.

Applications are to be submitted through the selected electronic banking.

For whom? Small and medium enterprises

What amount? Up to PLN 3.5 million

The subsidy received by the entrepreneur may be redeemed up to 75% after expiry of 12 calendar months from the date of granting the subsidy, on the following principles:

• 25% on condition of continuation of operations
• 25% depending on the company’s loss on sales
• Additionally, 25% depending on maintaining average employment over a 12-month period.

Applications are to be submitted through the selected electronic banking.

For whom? Big companies

What amount? Determined on the basis of individual financial analysis

PFR financing available to large companies can take the following forms:

• Liquidity financing in the form of loans or bonds for a period of 2 years with the option of extension for by a year, up to PLN 1 billion
• Preferential financing in the form of preferential loans for a period of 3 years partially non-returnable and dependent on a financial loss and maintaining employment, worth up to PLN 750 million per entity
• Investment financing in the form of acquired equity instruments (shares or stocks) on an arm’s length basis or as part of public aid for up to PLN 1 billion per entity.

Applications are to be submitted through the PFR platform. Although this form of assistance is still awaiting the approval of the European Commission, it is now possible to submit preliminary applications.

The use of the above forms of assistance under PFR depends on meeting several conditions. It is worth mentioning one of them: the real beneficiary (definition in the meaning of separate acts) benefiting from financial support under the PFR program should have a tax residence on the territory of the Republic of Poland and settle taxes for the last 2 financial years (if applicable) on the territory of the Republic of Poland. In practice, it may be difficult for entrepreneurs with foreign capital to meet this condition. However, according to PFR’s explanations, a departure from this rule is possible (i) if the program beneficiary transfers his tax residence to the territory of the Republic of Poland within 9 months of granting the loan, or (ii) in the case of foreign enterprises – in case of accepting additional obligations, e.g. investment commitment, based on the individual consent of PFR.

II. Loans under the Industrial Development Agency (ARP) program

ARP – and its subsidiaries – has been designated under the so-called Anti-Crisis Shield 2.0 as an institution performing tasks in the field of financial support for entrepreneurs affected by the effects of COVID-19. At the moment, only the following programs are indicated on the ARP website, and it is still not possible to submit applications in some of them.

Form of aid: loan to finance the deficit in working capital

For whom? Small and medium enterprises

The loan amount can be up to PLN 5 million, with a financing period of up to 6 years and a grace period of up to 15 months. Interest rate at WIBOR 1M level + margin specified in the margin table included in the Basic Terms and Conditions for Granting Loans to Small and Medium Enterprises under the Anti-Crisis Shield.

Form of assistance: loan to finance the payment of salaries

For whom? Small and medium enterprises

Additional support to the already available payroll subsidy, as a rule, paid to employee accounts, although it is possible to have it received on the enterprise account if some conditions are met. Financing for up to 2 years, with a grace period of up to 12 months.

Interest rate at WIBOR 1M level + margin specified in the margin table included in the Basic Terms and Conditions for Granting Loans to Small and Medium Enterprises under the Anti-Crisis Shield.

Form of aid: operational leasing with a grace period

For whom? Small and medium enterprises

Intended for refinancing leases in commercial leasing companies and associations, condition: company turnover above PLN 4 million and positive results (EBIDTA and net result) for 2019. Lease amount up to PLN 5 million, financing period up to 6 years, grace period for paying installments up to 12 months.

Interest: WIBOR 1M + margin in line with the product price grid.

III. National Economy Bank (BGK) support package

Some of the following programs available under BGK are under preparation, in cooperation with ministries and the banking sector. In part, the approval of the European Commission is awaited.

Form of aid: subsidies for interest on bank loans

For whom? Small, medium, large companies

Form of assistance: loan for technological innovations

For whom? Micro, small, medium companies

EU loans: changing the terms and conditions for repayment of EU loans for more favorable ones

For whom? Micro, small, medium companies

Feel free to contact us if you would like to receive more information on specific types of assistance or need help in preparing the application.