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Guarantees granted for loans dedicated to the financing of working capital

 

Pursuant to Law no. 329/2009 and to Government Emergency Ordinance no. 43/2013, the Rural Credit Guarantee Fund (FGCR) provides guarantees in favour of banks and other financing institutions that have entered into Cooperation Agreements with the Fund, in order to secure the loans or other forms of financing they grant for financing operating activities/working capitals in agriculture.

The FGCR guarantee can cover up to 80 % of the loan value. The outstanding amount of the guarantees, up to the value of the loan and the related interest, will be secured by the beneficiary/third-party guarantors.

The Fund has developed simplified guarantee provision mechanisms, so that obtaining the guarantee should not hinder the lending process.

Farmers and processors of agricultural/fishery products, registered as:

  • Commercial companies
  • Authorised natural persons, individual enterprises, family enterprises
  • Associations, agricultural companies and agricultural cooperatives
  • Natural persons acting as agricultural producers

For the purpose of considering and deciding whether to provide the guarantee, the financing institutions* that have entered into Cooperation Agreements with FGCR shall observe the following general minimum conditions of guarantee:

  • The loan must be used for financing agricultural/fishery production or for processing agricultural products (excluding trade in agricultural products);
  • The beneficiary’s rating by the bank must allow for the guarantee to be granted;
  • The beneficiary must not be in financial distress;
  • The beneficiary must not be subject to insolvency proceedings and must not meet the criteria set forth by the national legislation for the initiation of collective insolvency proceedings at the request of its creditors;
  • The beneficiary must not have overdue amounts recorded in the Central Credit Register/Credit Bureau records (or, if such amounts exist, their payment must be confirmed by the date the guarantee is approved);
  • The beneficiary must hold agricultural land/plantations/fish farming or aquaculture holdings/livestock populations or livestock farms/poultry farms/bees, etc., according to the documents issued by APIA;
  • A suretyship contract must be concluded with at least one of the stockholders/shareholders/directors/legal representatives of the firm, acting as natural person(s).

Additionally, for processors of agricultural products:

  • The beneficiary must qualify as an SME.

* The following financing institutions have entered into Cooperation Agreements with FGCR that allow for simplified general conditions of guarantee: CEC Bank, Banca Transilvania, OTP Bank and Libra Internet Bank.

 

For those financing institutions that have not entered into Cooperation Agreements allowing for simplified general conditions of guarantee, the following requirements also apply:

  • legal entities:

– must not have overdue debts to the general government budget, whereby the payment of such debts has not been regulated (staggered payment agreements, postponement, etc.) or they cannot be covered from the amounts to be recovered from the government budget, as specified in the tax certificate;

– must not be subject to foreclosure by the National Agency for Fiscal Administration (ANAF) (unless such foreclosure is suspended following the approval of staggered payments for the tax obligations), according to Section III.D “Other mentions” in the tax certificate;

  • natural persons:

– must have no debts with the competent fiscal authorities.

*The loan agreement can be signed before applying for the FGCR guarantee, subject to obtaining the guarantee from the Fund

Commercial companies/agricultural companies/cooperatives Authorised natural persons, individual enterprises, family enterprises, newly established companies or companies that have never taken loans before, natural persons
Starting from 1.25 % per year* 3.8 % per year

 

The fee applies only to the value of the FGCR guarantee, not to the entire loan value.

Where the lending period is shorter than one year, the fee is calculated for that period only.

 

*Based on the beneficiary’s rating by the bank.

For the purpose of considering and deciding whether to provide the guarantee, the financing institutions* shall submit to the Fund, at notificari@fgcr.ro, the following scanned documents:

 

FGCR-specific documents

  • The guarantee application (a document reserved to the bank);
  • A declaration on not being “in distress”
    • Simplified form – for natural persons, authorised natural persons, individual enterprises, family enterprises, and companies established less than three years before;Download
    • Complete form – for companies established for more than three years;Download
  • Declaration of acceptance of the FGCR policy on the processing of personal data, signed by the legal representative (original). Download

Documents that are usually included in the loan file of the bank:

  • The latest annual balance sheet (for beneficiaries that are required by law to prepare a balance sheet and that have been registered with the National Trade Register Office (ONRC) for more than three years);
  • Certification from APIA;
  • Certificate of company details issued by the ONRC (in its extended form) or identity card/document, as appropriate.

Additionally, for processors:

  • Declaration on qualifying as an SME; Download
  • Documents stating that the beneficiary holds/operates agricultural/fish farming facilities.

* At present, the following financing institutions have entered into Cooperation Agreements with the FGCR that allow for a simplified documentation and guarantee provision flow: CEC Bank, Banca Transilvania, OTP Bank and Libra Internet Bank.

For those financing institutions that have not entered into Cooperation Agreements allowing for a simplified documentation and guarantee provision flow, the guarantee documentation shall also include, in addition to the above-mentioned documents:

  • an analysis report prepared by the financing institution;
  • the approval documents issued by the financing institution for the loan and the excerpts from the minutes of the credit committee meeting;
  • the latest balance sheet as at 30 June of the current financial year, duly submitted;
  • the latest monthly trial balance prepared before the date of the guarantee application;
  • a tax certificate valid on the date of the guarantee application, stating that the beneficiaries:
  • have no overdue debts to the general government budget or such overdue amounts can be covered from the amounts to be recovered from the government budget;
  • are not subject to foreclosure by the National Agency for Fiscal Administration (ANAF) (unless such foreclosure is suspended following the approval of staggered payments for the tax obligations), according to Section III.D “Other mentions” in the tax certificate;
  • the tax certificate application, whereby the loan beneficiary requests that such certificate should detail the status of his tax obligations that entail foreclosure, as mentioned in the application form.