Emergency Ordinance no. 130/2020 regarding measures for financial support from non-reimbursable external funds, related to the Operational Program Competitiveness 2014-2020 (POC 2014-2020), in the context of the crisis caused by COVID-19 (hereinafter “GEO 130/2020”) entered into force on August 6th 2020.

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Grants for businesses affected by the COVID-19 pandemic

Emergency Ordinance no. 130/2020 regarding measures for financial support from non-reimbursable external funds, related to the Operational Program Competitiveness 2014-2020 (POC 2014-2020), in the context of the crisis caused by COVID-19 (hereinafter “GEO 130/2020”) entered into force on August 6th 2020.

GEO 130/2020 provides the general framework for providing financial support from non-reimbursable external funds to certain categories of beneficiaries affected by the current economic crisis, or beneficiaries whose activity has been banned or restricted by military ordinances during a state of emergency or alert. The financial aid is granted as micro-grants, working capital grants and investment grants, as detailed below.

1. Micro-grants

Micro-grants are one-time lump payments of EUR 2000, granted to certain beneficiaries. The total budget for micro-grants is EUR 100 million, of which 85% is allocated from the 2014-2020 POC budget, and 15% from the state budget.

Those who may benefit from a micro-grant fall under one of the following categories:

  1. small and medium-sized enterprises (hereinafter "SMEs") that did not have employees as of 31 December 2019;
  2. authorized natural persons (hereinafter “PFAs”) and NGOs carrying out economic activity in one of the numerous areas listed in the annex to the legislative act, such as editing activities, production of non-alcoholic beverages, production of textile products, ;
  3. PFAs / individual medical offices (hereinafter “CMIs”) involved in the transport, equipment, evaluation, diagnosis and treatment of patients diagnosed with COVID-19, if these have not benefited from the incentive granted by GEO no. 43/2020.

In order to benefit from this type of financial support, beneficiaries must cumulatively meet the following conditions:

  1. active for a period of at least one year before the date of submission of the application (with the exception of PFA and CMI, whose activity must have started no later than 1 February 2020);
  2. SMEs with a turnover of at least 5,000 euros in the previous financial year (with the exception of PFAs and CMIs);
  3. maintain their activity for a period of at least 6 months from the date of receiving the micro-grant.

2. Working capital grants

The grants for working capital are intended for SMEs whose activity has either been affected by the COVID-19 pandemic or has been banned or restricted by military ordinances.

The amount of the grant will differ depending on the beneficiary’s turnover, as follows:

  1. in case of a turnover between EUR 5,000 and EUR 13,500, the grant shall be EUR 2,000;
  2. in case of a turnover between EUR 13,500 and EUR 1,000,000, the grant shall be 15% of the turnover but no more than EUR 150,000.

 

In the case of related enterprises, if several applications are submitted, the cumulative grant may not exceed EUR 250,000. If one of the related companies does not meet the conditions to qualify as an SME, the grant may not exceed EUR 150,000.

The grant for working capital involves co-financing from the beneficiary, amounting to 15% of the requested sum.

In order to be eligible for this grant, the beneficiary must meet the following conditions:

  1. obtain an emergency certificate (as provided by GEO no. 29/2020);
  2. registered profit from their current activity in one of the two financial years prior to the submission of the application;
  3. maintain or supplement their number of employees for a period of at least 6 months from the date of receiving the grant.

The list of expenses for which the microgrant or working capital grants may be used, are: (i) expenditure on raw materials, materials or equipment; (ii) current or outstanding debts, including debts to utility providers, debts to the state budget; (iii) rental expenses; (iv) expenditure on the purchase of inventory items, etc.

3. Investment grants

The amount of the investment grants depends on the investment project and its financing needs. The grants range between EUR 50,000 and EUR 200,000. Elgible investments for financing refer to:

  • expansion of existing production capabilities/services;
  • building new units for production capabilities/services;
  • rehabilitation/modernization of existing units.

As is the case for working capital grants, investment grants shall also be co-financed by the beneficiary, in the amount of:

  1. minimum of 15% of the grant amount, for beneficiaries from disadvantaged regions;
  2. minimum of 30% of the grant amount, for beneficiaries from the Bucharest-Ilfov region.

The conditions that the beneficiaries must fulfil are the following:

  1. active for at least one year prior to the date of application;
  2. registered a profit from their current activity in one of the previous financial years;
  3. commitment to ensure the sustainability of the project, by ensuring that the activity will be carried out for a minimum of three years after the expiration of the project’s implementation period;
  4. achieve at least 50% of the revenue provided in the business plan in the first two years after the expiration of the implementation period, and the rest of the revenue by the end of the third year;
  5. hold the means to co-finance the grant;
  6. commitment to provide evidence of the reasonableness of the costs incurred in the project.