All you need to know about accessing public funds for your project

Do you have a project in mind, and you need public financing? Lack of familiarity with the terminology of a call for applications is a significant barrier in accessing public funds. In case you are not familiar with the terminology of public calls for proposals, the following article addresses some of the key questions you might often ponder when seeking public funds.

WHAT DOES IT MEAN THAT WHEN THE CALL IS SUBJECT TO DE MINIMIS?

To understand the context, we cannot forget that Spain is a Member State of the European Union, subject to the rules and conditions of its Founding Treaty. Public funding calls subjected to de minimis calls are those  that Member States may grant without the obligation to notify the European Commission, because of their small amounts  and therefore do not distort competition.  These are regulated by Regulation 1407/2013, which establishes a maximum de minimis aid ceiling of €200,000 for companies (or groups of companies operating in the same country) for a period of 3 years. For some sectors, such as road freight transport, this ceiling is reduced to €100,000.

Neither are all calls for public funding are subject to the de minimis regime – a provision that is set out in the regulations governing each programme – nor are all potential beneficiaries of the same programme subject to the de minimis regime. Accordingly, a detailed reading of the rules and the specific call for proposals is necessary to verify if  this provision is applicable to the call of public funds of your interest.

Determining whether the programme is subject to the application of de minimis provision is important for its weighting on project budget design or deciding on which programme to go for. When making this decision, it is important to bear in mind that the de minimis provision is calculated from the moment of the official communication of the favourable decision to grant each financial aid and that the analysis must be carried out over 3 fiscal years (the current and the two previous ones).

WHY DO SOME PROGRAMMES IMPOSE FINANCIAL GUARANTEES?

Some programmes establish the obligation to provide financial guarantees for the granting of funds, or to receive a pre-financing payment of the aid granted (partial or total). This obligation depends on the body managing the funds, the programme, the beneficiary and/or the amount of financial aid. Its purpose is twofold: on the one hand, to guarantee the beneficiary company’s commitment to carry out the actions financed (especially in the case of advance payments) and, on the other hand, to guarantee the repayment of the aid in the case of repayable loans during the repayment period (which can be up to 15 years, depending on the programme).

The percentage of guarantees to be provided and their conditions will be regulated by the body managing the funds as per the regulations of each programme. In some cases, the obligation to provide guarantees may be discretionary on the part of the fund manager and determined by the financial status of the company applying for support, while in other cases, the obligation applies across the board to all programme beneficiaries.

CAN I COMBINE GRANTS FOR THE SAME PROJECT?

This is another point to bear in mind when designing a project funding strategy and applying for public funds. Some programmes allow compatibility with other sources of funding at national and European level, but it is essential to analyse the specific regulations of each programme whose funding is to be combined with for the same action.

Compatibility between grants is always possible when the programmes do not cover the same costs and investments for the same project. Additionally, some programmes can be combined for the same actions and investments, if the maximum percentages of funding established by the European Block Exemption Regulation 651/2014 are not exceeded, which sets different percentages depending on the size of the company or the type of project (R&D, innovation in processes, energy efficiency or investment in renewables, for example).

At Euro-Funding we provide our clients with customized financial solutions, facilitating quick and efficient access to  various and diversefinancing instruments according to their specific financial context (monetization/cash-back, participation of private financial institutions, guarantees and collateral, generation of EIGs or subrogation of credits, among others).

Do you want to find out about funding opportunities for your projects?