Guarantee funds for SMEs and ISMEA guarantee

Guarantee Funds for SMEs (Italian Law n. 662/96)

The legislation

With the Guarantee Fund for Micro, Small, and Medium-sized Enterprises and professionals, the Government intends to support economic initiatives by facilitating access to Loans.

The guarantee is a tool offered by the Italian Ministry of Economic Development, which can only be used with loans granted by Banks, for both normal business management and for investments.

The guarantee can be issued for a maximum cover of €2,500, 000,00 and for up to 80% of the loan granted; these limits are intended as per individual final beneficiary.

On the guaranteed portion of the loan, the Bank can benefit from what is known as "zero weighting" (Italian Ministerial Decree dated 25 March 2009 - Bank of Italy Communication 03 August 2009).

Who we cater for

We offer our services to Lending Institutions interested in outsourcing the management of public guarantees.

The key points  

Difficulties relating to this  legislation are those typical of concessional laws and include the constant updates, the cumulability assessments, compliance with defined deadlines, and the correct interpretation of regulatory wording.

How we do it

The following diagram shows the methodological approach adopted at Warrant, which has ten years' experience in the field, working with banks and Lending Institutions.
The customised methods applied ensure efficient activities, fewer operational risks,  and certain effectiveness of the guarantee.

The ISMEA guarantee*

The legislation

The guarantee aims to facilitate access to credit for farming businesses, reducing absorption of regulatory capital in compliance with the Basel criteria.

The guarantee can be issued for a maximum cover of 2, 000,000.00 and up to 70% of the amount, although this limit can be raised to 80% in the case of young farmers, as defined by EC Regulation 1257/1999 and by Articles 1 and 2 of Italian Law n. 441/1998; these limits are intended as per individual final beneficiary.

The key points

Difficulties relating to this  legislation are those typical of concessional laws and include the need to meet the deadlines, the assessment of cumulabilty with  other concessions, and the correct interpretation of regulatory wording.

Analysis of companies in the agricultural industry is also made more complex by the lack, in most cases, of official Financial Statements and the particularities of the industry.

*Decree dated 22 March 2011, issued by the Italian Ministry of Agricultural, Food, and Forestry Policies in agreement with the Minister of Economy and Finance.