SIH Launches Anti-Corona Capital to Support Innovation-Focused Companies Affected by COVID-19 Pandemic
Bratislava, September 11, 2020 – One of the negative effects of the COVID-19 pandemic has been slowing down the inflow of investments into Slovak innovation-oriented companies in the growth phase, which may lead to their undercapitalization. Therefore, the Slovak Investment Holding (SIH) and the Slovak Alliance for Innovation Economy (SAPIE) with support from the Ministry of Finance (MF SR) have prepared a new financial instrument that should allow the SIH to support innovation-focused businesses during the current period of difficulty.
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 with the requirements (or their compliance is limited) 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 this very 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.
“In the long term, the SIH is aware of the importance of innovation-focused companies to the future of Slovakia’s economy. In launching of this financial instrument, we merely continue to support these companies that form one of our strategic segments. The SIH Anti-Corona Capital programme represents a specific form of support especially for innovation-oriented companies and follows up on SIH previous activities aimed at mitigating the negative economic effects of COVID-19, which we have implemented so far through our SIH Anti-Corona Guarantees for banks,” said Ivan Lesay, SIH CEO.
“It is our long-term ambition to help innovation-oriented firms to promote their further growth and development. Our cooperation with the SIH is an important step toward not only furthering the growth of individual firms but toward improving Slovakia’s innovative environment and pushing it in the right direction,“ added Michal Kardoš, SAPIE Executive Director.
The investment funds shall be available in the form of convertible loans with maturity of 18 to 36 months, provided that the maximum amount of principal and accrued interest does not exceed €800,000 at maturity. The SIH shall extend the loans starting at the minimum amount of €200,000, provided that interested parties’ turnover or overhead costs comply with the required limits. The call for interested parties shall apply until September 30, 2020, and the loans shall be provided until December 31, 2020. The call has been released on the SIH official website.
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 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. The 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.