BURSA, ANEIR Organize European Financing Risk Management Conference How To Obtain European Money: Consulting The Bank, Co-Financing, Seriousness

Andreea Arăboaei

A quarter of the applications for EU changes have greatly reduced chances to succeed because the applicants do not consult a bank before submitting them, according to Ramona Ivan, a manager with the Financial Institutions Department of BCR, who attended the conference "Risk Management. European Funding" organized by the newspaper BURSA and the National Association of Exporters and Importers in Romania (ANEIR).

"If the applicant does not go to a bank from the beginning to verify the sustainability and viability of the project, there are great chances that the project may be rejected, because there are many problems that the customer cannot anticipate," she said. In her opinion, another key element of a successful application for funding from the European Union is the appointment of a project manager from within the company, as the approach to such funding is very much different from the company"s regular accountancy.

"It should be known that the discussion with the applicant for such funding is free of charge, so we encourage applicants to have very serious discussions with the banks" specialized consultants," Ramona Ivan added. Those who apply to a bank for co-financing should make sure that the sum they apply for is as close as possible to the sum they actually need, and not necessarily equal to the maximum sum acceptable by the bank. Doing so also increases the chances for a successful application, Ivan added.

Considering the economic crisis, EximBank has improved the flexibility of their lending, guarantee and assurance terms, in correlation with the latest developments on the lending market and in the real economic, according to Corina Vulpes, Manager of Domestic and International Financial Relations, EximBank.

The bank offers sovereign guarantees in the name and on behalf of the Romanian State, loans with subsidized interest, financing for priority sectors, pre-financing for grants, co-financing for eligible project expenditures and for non-eligible project expenditures. EximBank also offer de minimis aid, which ensures the substantial reduction of the cost of RON-denominated loans. Such aid comes with a 5% subsidy on the interest rate and can reach 1.5 million EUR in RON-equivalent, the EximBank representative further said. The matter of importance is to have applicant companies prepare a long-term strategy in which the de minimis aid is a tool, not a purpose, Vulpes explained.

Mihai Ionescu, President of the National Association of Exporters and Importers in Romania (ANEIR) stressed that it should be well understood that State-controlled banks were slower to react on customer requests for two reasons: bureaucracy and a substantial increase in the number of applications to be processed.

CEC Bank, a bank focused on financing small- and medium-sized enterprises, finances investments of proven viability and seriousness, according to Vice President Mirela Iovu. As an example, the applicant should not overestimate profitability as any profitability estimate above 9% will cause suspicions during a period of recession.

Guarantee funds can offer valuable support to companies whose guarantees are not sufficient for a loan. Applicants can turn to the National Guarantee Fund for Small- and Medium-Sized Enterprises and the Rural Credit Guarantee Fund. Such funds can offer guarantees of up to 80% or, respectively, 100% of the value of the loan based on the same documentation as that requested by banks, said the representatives of the funds who attended the conference. The time necessary for obtaining the letter of guarantee is another important issue, as it can vary between 24 hours and 5-7 days, depending on the value of the guarantee.