Bratislava, December 18, 2020 – The COVID-19 pandemic has negatively affected many sectors of Slovak as well as global economy, with start-up innovation-oriented companies being particularly vulnerable to its devastating effects. In September 2020, the Slovak Investment Holding (SIH) in cooperation with the Slovak Alliance for Innovative Economy (SAPIE) and the Ministry of Finance (MF SR) released a call to support innovation-oriented companies; based on this call, the SIH has approved convertible loans for a dozen of these companies this week. The names of the companies will be published after individual loan agreements are signed; the amount of provided loans hovers between €200,000 and €645,000.
The SIH Anti-Corona Capital is a programme of providing convertible loans designed particularly for companies that are financed via venture capital. These companies usually do not comply (or their compliance is limited) with the requirements to obtain credit funding due to their insufficient profitability, which is a direct result of their initial growth phase and ensuing high operating investments into development and implementation of their products and services. Besides affecting businesses directly in the form of revenue deficits, the COVID-19 pandemic also caused uncertainty on financial markets that has seriously downsized European venture capital market and has led to cancelling or postponing many investments. However, it is exactly this type of investments that is indispensable to developing innovation-oriented companies, furthering a gradual transition to knowledge economy and increasing competitiveness of the Slovak Republic and the European Union in the long-term horizon.
As this programme provides specific assistance in the form of investment, the provision of loans has required a full-fledged due diligence audit and the entire process from releasing the call to approving the loans has taken approximately three months. “We are very glad to have been able, thanks to assistance from our partners from the MF SR and SAPIE, to approve convertible loans for innovation-oriented companies within our SIH Anti-Corona Capital programme. Many of these companies rank among leaders in their respective fields and us at the SIH are extremely happy that we can become part of their success story from now on. The actual provision of funds still must be preceded by the signing of loan agreements, which is why we will not publish the names of individual firms until after their signing; however, most of them are well-established companies, some of which boast the Seal of Excellence certificate,” said Ivan Lesay, CEO of SIH.
“In the long-term, the Slovak Alliance for Innovative Economy has an ambition to seek and co-design solutions aimed at supporting innovation-oriented firms. This is why we are particularly glad that in this difficult times we have succeeded in designing an instrument that gives innovation-oriented companies significant support and an opportunity for their further growth,” seconded Michal Kardoš, SAPIE Executive Director.
“I greatly appreciate that the SIH has been very flexible in designing a tailor-made tool for innovation-oriented companies, which face very specific challenges financing their activities even outside the current pandemic, and put together and approve a very detailed list of eligible companies. I believe it will help these companies grow, be successful and thus encourage Slovakia’s innovative ambitions,” concluded Martin Polónyi, General Manager of the Finance Ministry’s Section of International Relations.
Slovak Investment Holding
The SIH is a joint-stock company that is 100-percent owned by the Slovak government. Its main mission is to support strategic public as well as private investments in Slovakia in the field of infrastructure, energy efficiency, waste management, social economy, and small and medium-sized enterprises. It draws the funds to pursue its investment designs from European structural and investment funds. The SIH finances the projects exclusively via repayment schemes, i.e. through financial tools as opposed to grant programmes.
Slovak Alliance for Innovative Economy
The Slovak Alliance for Innovative Economy (SAPIE) is the largest national organization associating over 100 subjects that form the ecosystem of innovative and digital economy in Slovakia and providing the platform that promotes a dialogue between its individual members and encourages discussion on topical issues related to innovation-based economy. The Alliance acts as the umbrella organization for innovation-oriented companies in Slovakia and promotes the adoption of open, progressive and flexible legislation that catalyses innovation. SAPIE also creates networks that promote knowledge sharing, increases awareness of the needs of parties involved in the innovation process and, last but not least, serves as the contact point for entrepreneurs, investors and decision-makers within the innovations ecosystem.