MFB launches HUF 100 billion Factory Rescue Liquidity Guarantee Program

The Hungarian Development Bank (MFB) is launching a guarantee program for large and medium-sized enterprises to offset the effects of the war, the sanctions imposed, and the resulting energy crisis on Hungary’s economy. 

The Factory Rescue Liquidity Guarantee Program aims to help manufacturing companies preserve capacity and jobs by boosting lending. The HUF 100 billion program will start in January 2023 and help businesses of all sizes.

Businesses need funding primarily to ensure their day-to-day liquidity, pay for rising raw material and energy costs, and retain workers. However, the tightening supply of credit means they need access to funding. The launch of a Factory Liquidity Guarantee Scheme is therefore necessary. A key objective of the MFB’s guarantee scheme is to help companies maintain and increase their competitiveness by stimulating lending.

MFB will provide guarantees to companies with at least 50 employees and a net annual turnover of at least HUF 4 billion (EUR 10 million).

The guarantee will stimulate the economy by helping economic operators maintain stability and safeguard their employees, maintain liquidity, and pay suppliers’ and subcontractors’ bills.

Credit institutions can use the Factory Liquidity Guarantee Program as security for working capital loans, overdrafts, or operating loans to finance supplier costs; for loans to replace such loans; or for guarantees or indemnities given by credit institutions to secure their repayment. MFB’s guarantee or indemnity may amount to up to 80 percent of the principal amount of the loan granted by the credit institution or the amount of the guarantee or indemnity given by the credit institution, with a maximum maturity of 5 years and a maximum amount of HUF 20 billion.

The program will start in January 2023. Further details and information will be available on mfb.hu.