MNB made the FGS Go! program even more flexible from 13 July 2020

MNB made the FGS Go! program even more flexible from 13


In order to support the financing of the economy, and of SMEs in particular, the MNB amended the conditions of FGS Go! in some points. The changes include the broadening of funding opportunities with respect to foreign investments, investments of condominiums and housing association and pre-financing of central budget subsidies. Credit assessment of working capital loans has become more flexible by streamlining the necessary documents. MNB drew banks' attention to the fact that it will monitor the compliance of the 10-workday credit assessment deadline as a matter of priority. The changes will take effect on July 13th.


By the design of FGS Go!, its extension effective from 13 July, MNB aims to boost investments in the SME sector in the third quarter after the downturn in the second quarter due to the coronavirus crisis, thus helping the national economy to recover as quickly as possible. According to a survey by MNB, banks expect to conclude contracts worth HUF 1,000 billion by the end of the year, almost half of which is expected to be related to new investments. Simplifying the conditions to access working capital loans for SMEs will help to remedy the financing difficulties caused by the loss of turnover during the crisis.


The most significant element of the expansion is that the preferential funding will also be available to finance foreign investments. From now on, SMEs can redistribute the investment loan funds to a company registered in a foreign country and directly owned by at least 50 percent, provided that the investment is only feasible through the direct acquisition of ownership by this foreign enterprise (for example, because of the specific regulatory requirements of the foreign country).


In the case of condominiums and housing associations, in addition to borrowing related to their own business activities, the program is also available for the implementation of modernization and energy saving investments (eg. insulation, mechanical engineering).


For newly created and micro-enterprises, as well as seasonal businesses, it is now possible to determine the maximum working capital loan amount ("limit") in a simpler and more flexible way. Related to this are the main rules:

§ if no annual report or tax return for the business year preceding the submission of the loan application is available, the amount of the limit calculated according to the accounting records of the SME for the same period is acceptable;

§ if justified by the seasonal business activity of the SME or the dynamic nature of its growth, it is possible to determine the amount of the initial and the annually revised limit on the basis of mid-year data (such as a general ledger statement);

§ if there are missing data to determine the limit amount in the tax return of SMEs not obligated to prepare an annual report, they can be replaced based on business accounting records and statements;

§ if the company does not yet have a fully closed business year, the limit amount can also be determined on the basis of the business plan of the company. The outstanding principal debt, though, should not exceed the limit amount of the SME calculated based on the quarterly accounting records (or the actual financing needs of the project).


It is now possible to pre-finance non-repayable grants received not only from the EU but also from the national central budget, grants which the SME has obtained, or – in case of normative state contribution – which it is entitled to, but the amount has not been paid.


The compliance with the accelerated credit assessment deadline of 10 working days followed by the receipt of complete documents will be checked randomly by the relevant bodies of MNB. In case of non-compliance, the credit institution will not be eligible for a subsidized refinancing loan with respect to the loan application.


The changes mean substantive facilitations to many companies, so it is important to be informed in detail to learn about the new opportunities, which may accelerate investments. The simplification of the working capital financing can help the lives of enterprises, but for banks, it may require the use of additional resources. Adherence to the 10 working day deadline may also necessitate the transformation of banking processes, and the automation of processes may be a priority.


Our earlier writings about the Funding for Growth scheme and the economic support measures of Central Bank of Hungary:

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