Action 2 – Advanced SME Digital Transformation

As part of the new "NSFR program 2021-2027," Action 2 - Advanced Digital Transformation of SMEs aims to support businesses that target the expansion of their digital and technological maturity through integrated investments in new ICT technologies that will enhance their competitiveness.

The Total Budget - Public Expenditure amounts to €150,000,000, which is distributed per Region, as follows:

Attica & South Aegean: €33,000,000
Other regions: €117,000,000.

The Action in details

Eligible Budget

The eligible budget for the business projects that will be submitted, can range from €50,000 to €650,000.
The eligible budget of the investment project can not exceed three times the highest turnover achieved in one of the three (or fewer if the company does not have three) closed accounting periods, preceding the year of submission of the funding application, with an upper limit of €650,000.

Beneficiaries of actions

Beneficiaries of the Action are Very Small, Small, and Medium Enterprises, which, among other criteria, should meet the following requirements:

Have completed at least one (1) full managerial year.
Be active in at least one (1) of the eligible NACE codes (as included in Annex XI of the Action's call) for one (1) year.
Have at least five (5) Annual Work Units (AWUs) in the calendar year preceding the application.
Provide a sworn statement ensuring private participation of at least 25%.
Score a minimum of 80 points in the digital maturity questionnaire.
Not have initiated any activities for the investment project before submitting the application. It is emphasized that cohabitation of businesses is not allowed, meaning that the equipment and/or software of the supported investment cannot be used by another enterprise. Cohabitation refers to the installation of the supported enterprise in the same non-distinct premises as another enterprise. In the case of cohabitation, the inclusion decision is revoked.

The investment projects that will be supported according to Commission Regulation 651/2014 of 17 June 2014 (EL L 187/26.6.2014), Articles 14 and 17, must have the character of initial investment. Additionally, they must meet one of the following criteria:

Creation of a new business establishment.
Expansion of the capacity of an existing unit.
Diversification of the production of a unit into products or services that have not been produced within it before.
Fundamental change in the entire production process of an existing unit.

Eligible Expenses

The expenses covered by Action 3 concern the acquisition of:

Equipment Expenses (indicatively): Procurement of advanced operating systems for facilities or personnel, production automation with robotic systems, upgrading internal data transmission networks, etc.
Equipment Expenses for the production of modern technological equipment and advanced digital systems with indicative but focused expenses (indicatively): Procurement of advanced technological systems and mechanical equipment for the production of Industry 4.0 systems and equipment, security systems (e.g., space surveillance, cyber protection, etc.), automation systems, robotic systems, etc.
Software Expenses (indicatively): Procurement of modern administrative and financial programming applications, digital security, customer and supply chain management, data analysis with artificial intelligence tools, production optimization, upgrading of provided services, etc.
Expenses for Services related to digital upgrading (indicatively): Technical support for the configuration and integration of new systems into the operation of SMEs, system certification, etc.

Funding Rates

The percentage of Public Funding (subsidy) ranges from 10% to 50% of the budget of the funding application, depending on the Region, the size of the enterprise, and the eligible expenditure.

Funding Scheme

GAK (General Block Exemption Regulation). The Action can be supported under the EU Regulation 651/2014 (GAK).

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What applies to the coverage of private participation in the investment plan?

Provision of a letter of intent / loan pre-approval to cover a portion of the private participation.
The portion of private participation can be covered either by own funds of the beneficiary or by bank borrowing. The entity's contribution to the total eligible investment cost can be made either through equity (own contribution) or through external financing, provided that twenty-five percent (25%) of it does not include any element of state aid. The investment loan can be obtained in a foreign currency.If bank borrowing is used, it should take the form of a bank loan or a bond loan issued in the public or private markets, or a loan from other financial institutions, excluding the form of an intercompany account. Movement of the higher loan can also be done through an intercompany account, if there is a separate agreement in that account, indicating that the loan is intended for the investment, with a clear reference to the loan's terms and conditions. In any case, if the business resorts to borrowing to cover the financing of the investment scheme, it is obliged to submit a copy of the relevant agreement with the necessary additional acts during the implementation of the program, in case the movement of the loan takes place through an open intercompany account. Debit interests, financial transaction fees, foreign exchange expenses, and debit exchange rate differences, as well as other net financial expenses of the beneficiary, are considered operating expenses and are not eligible.
As the Program falls under EU Regulation 651/2014, it is required that, during the submission of the funding application, the Private Participation (own funds and/or external financing) in the proposed budget of the investment plan amounts to at least twenty-five percent (25%) of it and must not include elements of state aid.

What happens after the inclusion decision?

You can approach the Bank for the provision of a long-term loan to cover a portion of the private participation, where it is provided, and/or for the provision of a short-term loan to finance the whole or part of the grant, with the assignment of the latter to the bank.

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