On Thursday 23 July, the European Commission approved a €2.6 billion Polish support scheme for companies whose activities have been affected by the Covid-19 pandemic. The scheme was approved under the Temporary Framework for State Aid.
Poland notified the Commission of a State guarantee on factoring products under the Temporary Framework. Factoring is an alternative source of working capital for companies other than bank loans; it is a financing and debt recovery technique used by companies to obtain advance finances, whereby the management of this is subcontracted to a specialised credit institution: the factor.
The Polish support scheme is open to companies of all sizes and will be implemented by the national development bank, Bank Gospodarstwa Krajowego (BGK).
The Commission found that the Polish measures were in line with the conditions set out in the Temporary Framework as the covered products are equivalent to loans. These products have the immediate effect of providing liquidity and giving rise to a repayment obligation. The factoring contract specifies further elements, including a discount on the amount of liquidity provided, which is equivalent to an interest payment, and the payment period of the invoice, which is equivalent to a loan maturity. (Original version in French by Lionel Changeur)