TEPIX III GUARANTEE FUND

This Fund was designed by the HDB to support SMEs in our country by offering them not only the necessary liquidity and capital for investments but also the ability to reduce their financing costs. The zero guarantee fee, grace period, and interest subsidy make financing more accessible, while revolving credit provides the flexibility that SMEs need to respond to the constantly changing market needs. Additionally, the investment and special purpose working capital loans enable SMEs to implement their strategic investments, expand, and enhance their competitiveness.

The TEPIX III Guarantee Fund is divided into two (2) Sub-Funds and targets specific categories of businesses. In detail:

• The “General Entrepreneurship” Sub-Fund targets all SMEs.
• The “Start-up Entrepreneurship” Sub-Fund targets micro and small businesses with up to 5 years of operation.

1. The TEPIX III Guarantee Fund subsidizes 100% of the guarantee commission for the entire duration of each loan contract.
2. The TEPIX III Guarantee Fund subsidizes part of the loan’s interest rate. The subsidy covers the first 2 years of the loan (from the first disbursement) and reduces the loan interest rate by 2% (or 200 bps) for businesses operating in the Attica & South Aegean regions and by 3% (or 300 bps) for businesses operating in other regions. This significantly reduces the overall borrowing cost for the business.
3. Each intermediary credit institution is required to reduce the interest rate of each loan significantly below the market average rate. The maximum interest rate that can be charged per investment category is listed in the interest rate and collateral table posted on the HDB website.
4. The maximum amount of collateral that a credit institution can request for each financing is not allowed to exceed 30% of the loan capital. 
5. For financing up to €50,000, the credit institution may only request personal guarantees.

Clarifications:

In the “General Entrepreneurship” Sub-Fund for working capital loans, businesses are entitled to an interest subsidy provided they have not received a business loan from another HDB program in the past.

The initial budget of the TEPIX III Guarantee Fund amounts to €300 million, which is allocated per Sub-Fund as follows:

• For the “General Entrepreneurship” Sub-Fund: €230 million, which, with leverage, creates a portfolio of €1.642 billion.
• For the ” Start-up Entrepreneurship” Sub-Fund: €30 million, which, with leverage, creates a portfolio of €150 million.
• An amount of €40 million has been reserved for the interest rate subsidy.

Thus, the total leverage created by the TEPIX III Guarantee Fund amounts to €1.792 billion.

Through the TEPIX III Guarantee Fund, the following loans will be provided to the two Sub-Funds:

• Investment Purpose Loans
• Special Purpose Working Capital Loans
• Special Purpose Revolving Credit Working Capital Loans

The maximum loan amounts are defined per Sub-Fund category as follows:

For the “General Entrepreneurship” Sub-Fund:

For investment loans:

• The maximum amount is €10 million (Aid Scheme Article 21, para.3 of Reg. (EU) 651/2014).
• The maximum amount is €16 million (Aid Scheme Article 21, para.18 of Reg. (EU) 651/2014 or de-minimis scheme).

For special purpose working capital/revolving credit loans:

• The maximum amount is €500,000 (Aid Scheme Article 21 of Reg. (EU) 651/2014).

For the ” Start-up Entrepreneurship” Sub-Fund: 

For investment loans:

• The maximum amount is €15 million (Aid Scheme Article 22 of Reg. (EU) 651/2014).

For special purpose working capital/revolving credit loans:

• The maximum amount is €200,000 (Aid Scheme Article 22 of Reg. (EU) 651/2014).

The minimum loan amount is €10,000 and applies to both Sub-Fund categories.

The loan duration is defined by the Sub-Fund and the aid scheme it falls under as follows:

For the “General Entrepreneurship” Sub-Fund:

Investment Loans:

• Duration is 5-12 years including a grace period of 0-24 months (Article 21 para.3 of Reg. (EU) 651/2014).
• Duration is 5-10 years including a grace period of 0-24 months (Article 21 para.18 of Reg. (EU) 651/2014).

Special Purpose Working Capital Loans:

• Duration is 2-5 years including a grace period of 0-12 months (Article 21 para.3 &18 of Reg. (EU) 651/2014).

Special Purpose Revolving Credit Working Capital Loans:

• Duration is 0-3 years with annual renewal. Subsequently, there will be an automatic conversion by agreement into an amortizing/repayment loan for the remaining duration of the contract.  (Article 21 para.3 &18 of Reg. (EU) 651/2014).

For the ” Start-up Entrepreneurship” Sub-Fund:

Investment Loans:

• Duration is 5-10 years including a grace period of 0-24 months (Aid Scheme Article 22 of Reg. (EU) 651/2014).

Special Purpose Working Capital Loans:

• Duration is 2-5 years including a grace period of 0-12 months (Aid Scheme Article 22 of Reg. (EU) 651/2014).

Special Purpose Revolving Credit Working Capital Loans:

• Duration is 0-3 years with annual renewal. Subsequently, there will be an automatic conversion by agreement into an amortizing/repayment loan for the remaining duration of the contract. (Aid Scheme Article 22 of Reg. (EU) 651/2014).

The TEPIX III Guarantee Fund provides the following guarantee percentages per Sub-Fund:

• For the “General Entrepreneurship” Sub-Fund, a 70% guarantee is provided.
• For the “ Start-up Entrepreneurship” Sub-Fund, an 80% guarantee is provided.

The difficulty of accessing traditional financing sources is a significant obstacle for the sustainability and growth of SMEs. The TEPIX III Guarantee Fund was created to fill this market gap and, through the guarantee, protects credit institutions by covering up to 80% of each loan granted in case the business is unable to meet its contractual obligations. Therefore, the provision of the guarantee reduces the credit risk for credit institutions, making the granting of guaranteed loans more attractive to businesses, with the obligation to reduce borrowing costs and the required collateral.

Beyond the guarantee provided by the TEPIX III Guarantee Fund, credit institutions may request additional securities (contractual or/and collateral). Specifically: 

• For loans up to €50,000, only contractual securities are taken.
• For loans from €50,001 and above, collateral securities  up to a maximum limit of 30% of the total loan are taken.

The guarantee of the TEPIX III Guarantee Fund is provided with zero guarantee commission.

To join the TEPIX III Guarantee Fund, the prospective business must submit an electronic application:

1. A) On the KYC (Know Your Customer) platform of the Hellenic Development Bank through the website hdb.gr.  For each completed application and after a series of eligibility evaluations, the application is forwarded to the credit institution(s) chosen by the interested business for the submission of a non-binding offer. If the application is initially accepted, meaning the interested party receives a non-binding offer, a unique code is issued.
2. B) On the Integrated Information System of State Aid (OΠΣΚΕ) through the website https://app.opske.gr/ where the unique application number from the KYC platform must be listed for the interested business to continue the submission and completion of the electronic application with the credit institution from which it has already received the non-binding offer.

Upon completing the above process, the prospective business must visit the physical branch of the credit institution to submit the necessary documents.

1. Pancretan Cooperative Bank
2. Cooperative Bank of Thessaly
3. Alpha Bank
4. National Bank of Greece
5. Cooperative Bank of Karditsa
6. Cooperative Bank of Chania
7. Optima Bank
8. Piraeus Bank
9. Attica Bank
10. Eurobank
11. Cooperative Bank of Epirus