Grants of up to BGN 150 thousand for medium-sized enterprises

In today's article we will introduce you to another of the measures in relation to the coronavirus pandemic. It is aimed at medium-sized enterprises and consists of providing grants to applicants who meet certain conditions. It was launched on 10 July 2020 and the deadline for applications is 16:30 on 24 August 2020. In case you have already read our article „Безвъзмездна помощ до 10 000 лева за микро и малки предприятия“, then you are aware of the basics of the application procedure. In this case, it will also be conducted online through the ISUNinformation system. For this reason, applicants must have an electronic signature and be registered in the system.

The allocated funds for grants to medium-sized enterprises, which amount to BGN 200 million, will be awarded to the applicants whose proposals have received the highest scores in the evaluation stage of the procedure. In this case, the expeditious submission of proposals is not relevant, as was the case for the grants to micro and small enterprises, since this procedure is instead characterised by two evaluation stages. The first is for administrative compliance and eligibility, which will check that all the necessary documents have been submitted and that the applicants meet the necessary conditions as described in the Conditions of application for the programme. Applicants who have submitted eligible proposals will proceed to the second stage - technical and financial evaluation. Here, the criteria will be the comparability between the average EBITDA for 2018 and 2019, the tax expense ratio against the revenue generated for 2018 and 2019 and the existence of a direct link between the COVID-19 pandemic and the decline in the turnover of the applicant company. The maximum number of points that applicants can obtain at this stage is 30. KGK Law Firm experts are ready to prepare all the necessary documents as well as assist you in every stage of the application procedure. In case you have no experience in working with the ISUN system or have any other questions of any nature, do not hesitate to contact us.

The budget is to be divided by sector according to the 2008 Code of Classification, with the largest allocations to Sector C Manufacturing, Sector G Trade, Repair of Motor Vehicles and Motorcycles, Sector F Construction and Sector I Hotels and Restaurants. In the event that the budget for any of the sectors is not used, the Managing Authority has the right to reallocate the available resources to those sectors for which there is insufficient funding. The official name of the programme is 'Support for medium-sized enterprises to overcome the economic impact of the COVID-19 pandemic'and the eligibility conditions to be met by applicants will be set out in the following lines.

The minimum amount of aid requested is BGN 30 000 and the maximum - BGN 150 000. Eligible applicants are those who meet the requirements for medium-sized enterprises under the Small and Medium-sized Enterprises Act and the Commission Recommendation of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises. Only legal persons and sole traders are eligible. Branches of legal entities registered in Bulgaria are not eligible as they lack separate legal personality. Applicants must have completed 2 financial years (2018 and 2019) (2018 г. и 2019 г.) prior to the date of the call for proposals, during which they have carried out business activities.

The grant should be in the maximum amount of 5% of the turnoverin the Annual Tax Return under Article 92 of the Income Tax Act for 2019, In the case of sole traders, in the Annual Tax Return under Article 50 of the Income Tax Act for 2019. equal to or exceeding BGN 1 000 000,as indicated in the Annual Tax Return under Article 92 of the Income Tax Act or under Article 50 of the Income Tax Act for sole traders.

Businesses must have recorded a decline of at least 20% in turnover for one of the calendar months in the period from 1 February 2020 to the month preceding the month of application compared to turnover for the same month in 2019.

Those who are registered under the VAT Act shall prove the decrease in turnover through the VAT Return submitted to the NRA for the selected month of 2020 and the corresponding month of 2019. For legal persons or sole traders who are not obliged to submit the VAT Return and carry out an economic activity exempt from registration under the VAT Act, the source concerning the decrease in turnover is the turnover statement for the selected month of 2020 and the corresponding month of 2019, from which the turnover of the undertaking from the economic activity exempt from registration under the VAT Act is to be seen.

The applicant company should not be in difficulty on 31 December 2019and should not be an ineligible applicant according to the demarcation line with other EU-funded plans and programmes.

The presence or absence of certain conditions of ineligibility will be verified ex officio. These are: : declared bankruptcy, insolvency proceedings and liquidation proceedings;existence of tax and compulsory social security contributions; existence of conflict of interest; non-performance of public contracts, etc. If you would like to see a detailed overview of the ineligibility conditions, please contact us at office@kgk.bg.

There are also economic activities for which expenditure is not eligible under this programme. These are, for example, some of the activities under code C 16 'Manufacture of wood and of products of wood and cork; manufacture of articles of straw and plaiting materials', code C 10 'Manufacture of food products', code C 11 'Manufacture of beverages', activities in sector K 'Financial and insurance activities' and in the sector 'Fisheries and aquaculture', among others.

Eligible expenditure must have been incurred after 01.02.2020 and by the final project implementation date. The duration of implementation of each project shall be three months from the date of entry into force of the administrative contract. They must be recorded in the beneficiary's accounting records, products and services actually delivered, identifiable and verifiable, etc. Eligible costs must be for the purchase of raw materials, supplies and consumables intended to be used in the activity to produce the output or services; external or personnel costs (including gross wage costs and employer's social security and health contribution costs) under employment contracts concluded before 01.07.2020.

One of the main differences with the micro-enterprise procedure is that in this case it is possible to pay the grant by an advance payment followed by a final payment. Of course, it is also possible to make the reimbursement only with a final payment. However, if some applicants would still like to make use of the first option, it is important for them to know that they must provide a bank guarantee covering the full amount of the advance requested. They should also open a bank account for the purpose of receiving and spending the amount of the advance.

These were the highlights of the measure on grants to medium-sized enterprises. If we have managed to interest you, keep checking our website for other useful material.