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Subsidised and lost finance

SUBSIDIZED FINANCE – business contributions

What is subsidized finance?

It is possible to define facilitated finance all those interventions arranged by the regional, national or COMMUNITY legislature, which provide companies with financial instruments on advantageous terms. The aim is to encourage the development of new projects, the implementation of new investments or the recruitment of new staff.

In fact, the European Union, the state together with the Regions and Provinces, publish public notices in which they provide funding and other facilities for the development of companies.
In this sense, subsidized finance is an integral part of the business economy, because it helps the company to find financial resources on more advantageous terms.
In fact, a company can access more calls and indeed, by planning in time, can obtain more facilities for each type of investment.
For example, a company that accesses financing for the purchase of machinery or plants, can also apply for contributions for new hires or to obtain certifications, useful to ensure the performance of certain types of activities.

Investment types

A business plan must contain elements relating to the investments that are intended to be made and for which financial facilitation support is required; Expenses, net of VAT, relating to the purchase of equipment and other material and intangible goods for multi-year utility (investment) are eligible to finance.

We mean the machines necessary for the production of the product and that have a multi-year lifespan, the equipment, which are the small ones, still connected to the activity, but with a shorter average life; the tooling machine that is all those small tools that are used for the performance of the activity;

It refers to planting costs (feasibility study, executive project), research and development costs and capitalised advertising (i.e. actions with reasonable expectation of lasting effects, for example for the launch of a new product), patents and Licenses.

 so-called “lost fund”. It is calculated as a percentage of eligible expenditure.  There is no return of capital or interest payment.

The contribution is identified as revenue and must be taxed during the period of competence and for the full amount.  It is a type of facilitation granted to contribute to management costs (staff, advertising, travel, real estate leases, financial charges, etc.).

This is a contribution that is granted when a medium- and long-term loan is made. The contribution is made directly by the lender, which will use it to lower the interest rate applied to the financing of the beneficiary company.

the financing, if it is provided, is granted only on subsidised terms. Facilitation consists of medium/long-term financing with an interest rate below the market rate.

is comparable to an interest contribution, the facilitation (lost fund) is granted to reduce the cost of a financial lease (leasing) stipulated at market costs.

In some cases, the facilitation is to provide guarantees for medium and long-term financing that the entrepreneur would otherwise not have been able to provide. For this purpose, the guarantee funds normally set up by the Fidi Collective Guarantee Consortia are particularly important.