Small and medium-sized enterprises (SMEs) in Portugal were struggling to use funding opportunities provided by the government. The awarding bodies’ policies meant that it took businesses years to receive the approved grant money. Santander Totta, a banking institution and member of the European Union Grants Advisor (EUGA) in Portugal, offered zero per cent interest loans to SMEs to cover the amount of the awarded grant. Companies now receive funds within days without having to invest any additional funds.
Businesses access grants money immediately through a zero per cent interest loan
Number of Employees: 6,000
Industry: Financial Services - Banking
Customer Profile: Portugal-based Santander Totta is a private business banking institution. With 700 branches across the country, it serves more than 1.8 million customers.
EUGA: Microsoft is working in partnership with technology companies, banks, consulting agencies, and other organisations to help more SMEs obtain government funding through its European Union Grants Advisor (EUGA) programme. Through this programme, SMEs and local and regional governments increase their awareness and understanding of EU funds as well as take advantage of a facilitated application process.
The European Union Grants Advisor (EUGA) in Portugal is a Microsoft initiative working in partnership with Hewlett Packard, Sonae.com, and Santander Totta. One of its main functions is to help small and mediumsized enterprises (SMEs) understand and capitalise on funding opportunities from the European Union.
However, in 2007, it found that SMEs were unable to access these grants. Most government agencies released the money in installents or after the completion of the project for which the funds were approved. It could take years for a SME to receive funds. As a result, companies with limited financial resources found it difficult to make the initial investment to start their strategic projects.
EUGA member Santander Totta, a private banking institution with a 12 per cent market share in Portugal, provided the solution. In December 2007, it created a new financial product customised to the needs of SMEs. Companies who have grant applications approved from the state now receive:
- A zero per cent interest loan for three years from Santander Totta.
- Priority treatment for their loan applications.
- Cover for unlimited grant money.
The loan is repaid by the companies to Santander Totta when they receive the grant money from the government.
- Companies receive funds within days rather than years, as previously.
- They can complete their business development projects without any interruption due to lack of funds.
- SMEs can respond to commercial opportunities by investing in new projects.
Companies are encouraged to apply for funding opportunities because they have the security of receiving funds at the right time.
- The Portuguese economy has benefited from the growth and development of the SME sector.