Legal Eye: EU funding sources

The details of his proposals have yet to be explained but the general intent is clear: to decentralise and speed up the process.

The EU provides financial assistance to SMEs in many different forms, including loans, grants and guarantees. In some cases an SME may apply directly to the EU for assistance, while in other instances it is necessary to apply through the Ministry of Economy or a subsidiary agency.

Direct funding

Financial assistance is available to SMEs directly from various EU Commission Agencies without the involvement of the Polish government. Funding is available for up to 50 percent of the projected cost of a proposed project. However, in order to be approved a project must fall within one of four broad categories: environmental protection, education, research and development, and transportation. Specific information may be found on the EU Commission Agency websites.

Structural funds

European regional development funds, referred to as Structural Funds, are administered at a national or regional level, and are divided into four general categories: regional development, social affairs, employment, and agriculture. In order to apply for assistance, an SME, for example, wanting to improve its competitiveness, would need to apply to the Polish Agency for Enterprise Development, which administers two of the EU's Structural Funds, the EU Regional Development Fund and the EU Social Fund. An SME may apply to the Polish Agency for Enterprise Development for funding via Regional Financing Institutions located across Poland. Detailed information regarding the application procedure may be found at www.parp.gov.pl/strukturalne.

As with direct funding, Structural Funds may be awarded to all legal entities in a member state, including subsidiaries of non-EU parent companies.

Guarantees

Between 2001 and 2005 the EU Commission made available more than R350 (zł.1,346) million for the purpose of providing indirect financial assistance to SMEs throughout the member states, Poland included. Administered by the European Investment Fund, this funding is used to invest in capital funds and other business 'incubators' in support of SMEs, in addition to providing guarantees to financial institutions to promote the expansion of credit to SMEs. Detailed information may be found at www.eif.org. Additionally, the European Bank for Reconstruction and Investment provides project financing to banks in order to encourage the availability of financing to SMEs specifically in Central and Eastern Europe. More information may be found at www.ebrd.com/country.

Many other sources of financing are available to SMEs. A comprehensive list of all grants and loans available at an EU level may be accessed at www.europa.eu.int/grants.

Paul Fogo is a senior attorney with Miller, Canfield, W. Babicki & Partners