BY NIKOLAY TITOV, ATTORNEY, CO-FOUNDER OF A.T.LEGAL LAW FIRM

The Government of the Russian Federation has introduced a new instrument of state support for small and medium-sized businesses - the "umbrella" guarantee. Now even those entrepreneurs who previously could not count on preferential financing can obtain a loan quickly and at low interest rates. The guarantor is the Corporation for Small and Medium Business Development. The key difference of this measure from previous similar support options is the target program for certain groups of entrepreneurs in need of loan financing. According to the developers, this guarantee mechanism has the following advantages:

• access to concessional financing will be given to entrepreneurs who previously did not qualify for various financial support and lending programs;
• provision of funds at reduced interest rates;
• quick availability of funds;
• The "one-stop-shop" approach to obtaining a loan and a surety. Everything can be done in one visit to the bank and there is no need to go to the Corporation for a surety;
• no need to contact the Corporation for Small and Medium Business Development;
• To get money just go to the office of the partner bank of the program (for example, now the program involves banks such as Sberbank, VTB), through which the guarantee will be executed;
• the fee for the guarantee is paid by the partner bank, not by the guarantor.

BORROWER REQUIREMENTS

To take part in the program and secure a surety for a loan from a partner bank, a company must meet a number of mandatory requirements. They are prescribed in the document entitled "Regulations on granting sureties of Federal Corporation for Small and Medium Business Development JSC for obligations of small and medium businesses" (hereinafter - the Regulations). Those who wish to take advantage of the new measure of support are advised to first study the document and the Rules of interaction between banks and the Corporation when granting sureties (the Rules). These documents are publicly available at: https://corpmsp.ru/.../zontichnyy-mekhanizm.../

THE BORROWER MUST MEET THE FOLLOWING REQUIREMENTS:

• compliance with the provisions specified in Part 1, Art. 4 of the Law on the development of small and medium-sized businesses;
• registration in the register of small and medium-sized businesses;
• support is not provided to companies in some sectors such as gambling activities, financial activities, insurance, etc.;
• a company is not undergoing reorganization, liquidation or bankruptcy proceedings;
• the borrower did not violate conditions and the procedure for providing support to small and medium businesses, which are stipulated by the Law on Small and Medium Business Development. Information about such violations is published in the Unified Register of Small and Medium Businesses, which is publicly available on the Internet;
• no indebtedness to the partner bank.

TERMS OF SURETY

A surety is formalized by concluding a corresponding agreement, the parties to which are the partner bank issuing loans to entrepreneurs and the Corporation. Loans issued for up to 180 months can be secured by a surety. The term of the guarantee is tied to the loan term, which is increased by 120 days. In this case, the guarantee is provided only for 50% of the loan amount, and one should keep this in mind. The money can be provided to the borrower in the form of a one-time cash transfer, a revolving line of credit or an overdraft. To take advantage of this new measure of support, it is important to keep in mind that the Corporation can act as surety for the borrower only if the loan is taken for the following purposes:

- acquisition of fixed assets;

- replenishment of working capital;

- development of entrepreneurial activity;

- refinancing a loan obtained in another bank for the above purposes.

The total amount of the Corporation's financial responsibility under a separate surety agreement may not exceed 1 billion rubles. It is important to note that, in accordance with the Regulations, the Corporation begins to be liable for the borrower's debts only after 90 days from the date of default on the loan payment. However, if payments are made in favor of the partner bank under the surety agreement, the borrower will still be liable to the Corporation, i.e. the debt will have to be repaid in any case. Moreover, the corporation is responsible only for the entrepreneur's indebtedness in the amount of the principal debt; the surety does not cover penalties and other expenses accrued in connection with the delay.

A certain guarantee for entrepreneurs is the provision of the Regulations, under which banks cannot transfer their rights to borrowers to third parties without obtaining the prior consent of the Corporation. If the bank violates this provision, the new creditor does not become a party to the surety agreement.

PAYMENT PROCEDURE IN FAVOR OF A PARTNER BANK

The payment procedure regulated by the Corporation under the surety agreement to partner banks may be of interest for entrepreneurs. After funds transfer to borrowers, they will have to deal not with the bank, but with the Corporation itself.

In accordance with the Rules, a partner bank has the right to apply to the Corporation with a payment request under the surety agreement if the following conditions are met:

• the borrower delayed the payment of the principal debt for more than 90 days;
• inclusion of a corresponding loan agreement in the special Register of loans secured by a guarantee of the Corporation.

The Corporation has 30 calendar days to review the bank's application for payment under the surety agreement. After the transfer of funds to the partner bank, the Corporation receives the rights of the bank under the loan agreement, i.e. further interaction of the entrepreneur on the loan should be carried out via the Corporation.

Thus, the new measure of support creates more favorable conditions for entrepreneurs to obtain a surety of the Corporation. Organizational aspects of surety are modified. By coordinating the actions of the Corporation and partner banks through the adoption of the Rules and Regulations and other documents, entrepreneurs' access to loan financing is facilitated. The Corporation's guarantee, which can now be drawn up during a visit to the bank, provides entrepreneurs with additional bonuses, since they can count on more favorable lending terms. But since the program assumes that the borrower meets certain requirements, it is recommended to consult a lawyer in advance to assess the possibility of taking advantage of the new feature. He will help determine exactly whether the company meets the terms of the program.

Source: https://www.advgazeta.ru/ag-expert/advices/kredity-dlya-biznesa-sdelali-dostupnee/?fbclid=IwAR3oOD3fJQ0x45xwNe8CkOKpXl2pC_RNFa3F0BhxJgi1OPEVbn7ENp57jqw