Business Angels Given a Helping Hand

Businesses Flying High

Businesses Flying High

PLN 100m has been allocated for help in financing businesses and entrepreneurs who are new on the market. The Polish Agency for Enterprise Development (PARP) has over PLN 52m in funding to help the development of new businesses. The Ministry of Economy has decided to boost funding because the demand last year exceeded the Agency’s budget twofold. Over PLN 47m was distributed between 28 companies. PARP is considering announcing a deadline for the receipt of applications in order to motivate entrepreneurs to move faster. So far, there have been 18 applications for PLN 24.1m. Businesses not involved in the sale of products or services and that are still not making a profit are eligible. The funds may be spent on designing a product or service and launching it on the market. Loans may also be granted to companies that have not been in operation for more than one year, in order for them to expand production power or design a new product or service. PARP does not require any initial capital (as opposed to banks). However, this does not mean that collateral is not required. Entrepreneurs must introduce an additional investor: a business angel, seed fund or VC, which in exchange for shares or stocks will also invest some money. The Agency will then invest twice the amount of the investor. The loan may not be lower than PLN 200,000 or higher than PLN 2m. The interest rate is fixed for the whole financing period and amounts to 6.5% per annum. This is substantially lower than that offered by commercial banks, which rather finance companies that have been on the market longer. An entrepreneur, who has been granted a loan for setting up a business, should pay it back within eight years. A company that invests in expanding its business or product development, should pay back the loan within six years.
Dziennik Gazeta Prawna

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