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COVID-19 EU PolicyWatch

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Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case BG-2020-52/1665 Updated – measures in Bulgaria

Capital support for SMEs - Second Phase

Подкрепа с оборотен капитал за малки и средни придприятия

Country Bulgaria , applies nationwide
Time period Open ended, started on 21 December 2020
Type Other initiatives or policies
Category Supporting businesses to stay afloat
– Direct subsidies (full or partial)
Author Tsetomila Sabcheva and Luboslav Kostov (Citub) and Eurofound
Case created 06 January 2021 (updated 19 July 2021)

Background information

The measure concerns micro, small and medium enterprises, whose activities are limited by the temporary anti-epidemic measures introduced in the country. The affected businesses will be provided with working capital after applying for a project and approving it.

The funds provided under the scheme should be used to cover the current needs of the applicants and to incur operating capital expenditure. The money can be spent on raw materials, materials, external services and remuneration. The grant cannot be used to purchase goods for direct sale.

Content of measure

The budget of the program is €78 million, as the funding from the European Regional Development Fund is €66.3 million and the national co-financing - €11.7 million. The funds are provided under the Operational Program "Innovation and Competitiveness" 2014-2020 (OPIC).

Applicants must be micro, small or medium-sized enterprises - legal entities or sole traders, registered under the Commercial Act or the Cooperatives Act or legal entities registered under the Non-profit Legal Entities Act, and the registration should be made no later than 1 October 2020. Micro-enterprises have a staff of up to 10 people, an annual turnover of up to €1.95 million. Small enterprises have a staff of up to 50 people, an annual turnover of up to €9.75 million. Medium-sized enterprises have a staff of less than 250 people, an annual turnover of up to €48.75 million.

Each enterprise can apply with one project, which includes all its objects affected by the temporary restrictive measures, as the maximum eligible value of the support is €75,000. The calculation will be based on the percentage of turnover without VAT of the enterprise / specific site during the previous year.

Updates

The following updates to this measure have been made after it came into effect.

12 June 2021

This is the third phase of the program to support the working capital of those affected by anti-epidemic measures. A new BGN 55 million is provided for the provision of working capital through gratuitous funds under the Operational Program "Innovations and Competence 2014-20-20. So far, nearly BGN 120 million has been paid in the first two phases of the program.

21 January 2021

After January 21, 2021, the second phase of the measure came into force. The second phase of the program is related to the extension of working capital support, but not the admission of new applicants for grants.

The second phase of the program is related to the extension of working capital support, but not the admission of new applicants for grants. So far, more than 10,000 applications for grants worth a total of nearly €50 million have been approved.

Use of measure

The purpose of the assistance is timely and direct financial support in the shortest possible time to the Bulgarian companies for overcoming the economic consequences of the temporary anti-epidemic measures and stability of the jobs.

There is still no preliminary estimate of the number of companies that can and have benefited from the procedure, because the submission of documents is at its early stage. The grant under the scheme is provided by bank transfer within seven working days of project approval. The duration of the implementation of a support project is three months from the date of award of the grant.

Contents

  • Other topics

Target groups

Workers Businesses Citizens
Does not apply to workers SMEs
Does not apply to citizens

Actors and funding

Actors Funding
National government
Employers' organisations
Company / Companies
European Funds
National funds

Social partners

Social partners' role in designing the measure and form of involvement:

Trade unions Employers' organisations
Role Consulted Agreed (outcome) incl. social partner initiative
Form Any other form of consultation, institutionalised (as stable working groups or committees) or informal Direct consultation outside a formal body

Social partners' role in the implementation, monitoring and assessment phase:

  • Only employers' organisations
  • Main level of involvement: Peak or cross-sectoral level

Involvement

The measure was widely discussed between the government and employers' organisations. The unions were not so active, their role was rather consultative. The measure was developed entirely with the assistance of the business, which helped define the restrictions and eligible beneficiaries. This means that the measure was developed through prior consultation with the business, which greatly helped the administration to define the basic parameters in a way that allows for effective implementation. The role of trade unions was more limited, but they expressed full support, although it was not directly about supporting employment in SMEs.

Views and reactions

All social partners supported the measure within the consultative bodies that were conducted (bipartite and tripartite). Preliminary meetings were held with both business and trade unions, at which the Ministry of Economy presented its intentions in detail. At these meetings, the government received the approval of all parties (employers and trade unions).

Sources

  • 23 December 2020: Кандидатстване по програма „Подкрепа чрез оборотен капитал за МСП, засегнати от временните противоепидемични мерки (nra.bg)
  • 05 April 2021: Новини Пари НАП отново подканя 1000 фирми за подкрепа с оборотен капитал Новини Пари НАП отново подканя 1000 фирми за подкрепа с оборотен капитал Новини Пари НАП отново подканя 1000 фирми за подкрепа с оборотен капитал (www.pariteni.bg)

Citation

Eurofound (2021), Capital support for SMEs - Second Phase, case BG-2020-52/1665 (measures in Bulgaria), COVID-19 EU PolicyWatch, Dublin, http://eurofound.link/covid19eupolicywatch

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.