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Bulgarian Development Bank to back Covid-hit hospitality sector with 30.7 mln euro

Bulgarian Development Bank to back Covid-hit hospitality sector with 30.7 mln euro Photo: Bulgarian Development Bank / All rights reserved.

SOFIA (Bulgaria), January 4 (SeeNews) - State-owned Bulgarian Development Bank (BDB) said on Tuesday that it will provide direct financing of 60 million levs ($34.6 million/30.7 million euro) to small and medium-sized enterprises (SMEs) operating in the hospitality sector in order to help them tackle liquidity issues stemming from the coronavirus crisis.

The new support programme aims to support hotel operators and restaurant owners, including start-ups, to meet their operating needs and deal with overdue debts and current payments to financial institutions, the BDB said in a statement.

Many of the businesses operating in the sector are experiencing serious financial difficulties and risk of bankruptcy during the crisis and do not have access to relaxed lending conditions due to high sectoral risk, the state-owned lender noted.

The advantage of the BDB programme is that it provides access to financing for companies that are overdue for up to 90 days according to the Central Credit Register (up to 5% of the total portfolio) and up to 60 days (up to 45% of the total portfolio), through refinancing of their liabilities. Refinanced loans can be deferred within a period of up to two years, relieving the burden of their repayment installments, the bank said.

Under the programme, BDB will provide credit lines, credit overdraft, and standard working capital loans to hotels and restaurants that ceased operations in 2020 and 2021. The maximum amount of funding is set according to the size of the company and the type of product. Companies with a staff of up to 49 people will receive financing of 500,000 levs, while companies with a headcount of between 50 and 249 people will get 750,000 levs. The maximum amount of credit overdraft is 250,000 levs.

The new financing programme also offers an extended term of 48 months for standard working capital loans. The grace period is 18 months for hotel operators and 12 months for restaurant owners, according to the statement.

(1 euro = 1.95583 levs)

Bulgarian Development Bank AD is among the biggest banks in SEE, for more reference take a look at Top 100 banks
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