Long live the Fondo (di Garanzia)

Mr. Stio (NSA) says: 100 billion euros guaranteed by the FCG deserve the Fund to be expanded. In 2020 more applications than in previous 20 years.

by Isidoro Trovato- translated for NSA

Gaetano Stio
Chairman of NSA
Credit broker

The shock-wave of the global pandemic hit enterprises and led to the search for survival tools. Like the Fondo di Garanzia. “Expecting the Fondo di Garanzia itself to rescue Italian SMEs and professionals without an adequate extension of supportive measures would be a big mistake” – says Gaetano Stio, Chairman of NSA, leading credit broker in Italy. “Numbers speak for themselves: from January to November 2020, 1,341,430 operations have been placed with the Fondo Centrale di Garanzia vs.the 2,200,114 operations of the period beginning 2000 to March 2020. 62% of the last 20 years operations occurred in the last 11 months.”
The total amount guaranteed and actually provided by the FDG exceeded 100 billion euros.
“Given the emergency – continues Mr. Stio – continuity and stability of the Fud would be advisable for SMEs to access to credit and guarantees without further difficulties.”
According to data elaborated by the NSA’s Research Office, 90-100 thousand applications per month are expected during the first semester of 2021. “Which means 700-800 thousand applications will be placed in 2021, all things being equal and the FDG being prolonged,” says Mr. Stio. “If not, other facilities and measures will be required for SMEs to rely on guaranteed financing. Hopefully, free of charge up to 80% of the loan amount, having the eligibility rating suspended, so that requesting companies in light distress are not rejected. Access to the FCG for midcaps should also be ensured, having the guarantee ceiling of 5 million euros confirmed (for a maximum 6 million euros loan).
If these measures are respected, the Fund may play an essential role for SMEs’ survival.”

How to move

What is your suggestion to enterprises?
“Considering that credit worthiness in 2021 will be assessed basing on 2020 balance-sheets, most of which likely not too rosy, I suggest that companies turn to trusted banks that already know them. Previous established relationships may play a key role in the granting of a credit. Also, companies may consult credit brokerage for assistance and advice for a correct application.
Safe digital and properly conducted proceedings, with both the bank and the FCG, are essential for entrepreneurs in this very moment.”

What about banks?
“The key issue for banks is ensure they will not be exposed to any risk in case companies failing payback. Many banks could handle the whole applications themselves but relying on an experienced provider may ensure that no error or missing paper or misinterpretation will question the State guarantee when needed. In case of an external provider, like a credit broker, all responsibilities and troubles are up to him.”