The 3 programs of the Recovery fund that change businesses

Of Tasos Dasopoulos

With three programs that will run in the next period, the Recovery Fund will support the goal of Greece 2.0 for the transformation of Greek small and medium enterprises, so that they grow in size, learn to cooperate and become more extroverted.

The long-awaited plan for acquisitions, mergers and acquisitions, with the main motive of reducing the tax by 30% for five years, is in the final phase of consultation with the European Commission. In about 15 days the law – and the incentives – will be finalized and will be submitted to Parliament for a vote.

The program will strengthen small and medium enterprises freelancers and the institution of Franchising.

This addition was deemed necessary as in the current circumstances, joining a chain of stores, with a large parent company, is the most appropriate way of cooperation of small and large companies. Small businesses that join a franchise network will benefit from shared marketing, procurement and shared management systems, which are difficult for a small business to achieve.

At the same time, of course, the possibility of support for the new company from the low-interest loans of the Recovery Fund will be maintained at a rate of 30% to 50% of the investment plan that will be approved by the banks and the Ministry of Finance.

Contract farming

The relatively new institution of contract farming will be subsidized through the program for the strengthening of the agri-food sector with a total budget of 520 million euros, which is expected to start running in April.

Through this institution, farmers associated with processing cultivate specific varieties and have secured in advance the quantity and price they will sell. In this way, the farmers or cooperatives that will participate in the program, participate in a vertical production process while they can draw liquidity more easily. This is because they can provide a guarantee, part of the income of their contract for the sale of goods. At the same time, they will be able, in cooperation with the cooperating plant or plants, to improve their varieties and production, increasing the yield of their crops.

The subsidy will concern the financing for the possible change of cultivation or modern production methods in the existing one, in order for the farmer to be able to have the required quantities to conclude his contract.

Extroversion – exports

Another part of the private investments supported by the Recovery Fund is the sector of extroversion, ie the strengthening of exports, which is approached in a more modern way. Businesses that have at least 15% of their export turnover will be eligible. These will be supported by loans from the Recovery Fund in the amount of 30% of the investment budget, while if exports are a larger part of their turnover they will be supported in the amount of 50% of their investment proposal.

The lure in this category would be that an amount equal to 30% that export companies receive from Recovery Fund loans could be used for Marketing needs or as valuable working capital. This type of aid is theoretically eligible for financing with the first 970 million euros from the loans of 12.7 billion euros that have already been allocated to commercial banks for the financing of private investments.