Over 18 billion of new liquidity arriving for Italian companies small and medium-sized companies to face the challenge of the post-Covid-19 recovery, thanks to the agreement between the European Investment Bank (EIB) and Intesa Sanpaolo. This is essentially the first operation in Italy to support factoring operations (trade credit discounts) based on the Pan-European Guarantee Fund (EGF), one of the EU's tools for responding to the pandemic. In terms of the amount of liquidity that will reach businesses, it is the largest operation supported so far by the EGF in the whole European Union.
The EGF is one guarantee facility supported by 22 EU Member States, organized and managed by the EIB Group in partnership with the main European financial intermediaries to increase loans to the productive fabric with credit lines at advantageous conditions and rapid disbursement. The EIB-ISP operation therefore makes it possible to provide new liquidity to companies, financing their working capital through reverse factoring and confirming products, specifically dedicated to supply chains. The companies participating in the individual supply chains have the option of collecting their trade receivables in advance or deferring the payment of their trade payables through the intervention of the bank.
Indeed, the presence of the guarantee allows Intesa Sanpaolo to further invest in the financial instruments available to the Italian supply chains, increasing both the amounts of the loans and the number of companies involved. In detail, the EIB guarantee through the EGF is 750 million and will cover 65% of a portfolio of confirming lines towards large debtors, mainly made up of large (over 3.000 employees) and medium-sized (between 250 and 3.000) companies, to be built by the end of 2021. Thanks to the revolving effect of the underlying trade receivables recognized by large debtors (whose average duration is equal to 90 days) and with a tested leverage effect, it is estimated that, on a three-year basis, the support to SMEs for the financial cycle of supplies will reach approximately 18,2 billion euro. The FEG guarantee will ensure that Intesa Sanpaolo's new factoring lines will have a lesser impact on the bank's capital ratios, thus freeing up capital for regulatory purposes. According to Intesa Sanpaolo estimates, a total of over 50.000 SMEs and about 150 large and medium-sized companies will be affected in the three-year period.
