How subsidized finance can support the growth of Italian SMEs

Subsidized finance provides businesses with a series of financial and fiscal tools to support investments and development, benefiting from favorable conditions compared to market conditions. All of this is regulated by institutions and public bodies at local, national and community levels.

Thanks to subsidized finance, a company can gain access to non-repayable grants, European, state and regional calls for tenders: these are just some of the most common incentives offered to improve business and competitiveness and to encourage the creation of new entrepreneurial initiatives.

In This perspective is very important to fully understand these opportunities. Not only that: they can be an opportunity to create synergies and allow integration between resources at different levels, receiving support for the entire cycle of the facilitation.

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Subsidized Finance: What are the Main Advantages?

Compared to traditional loans, subsidized finance offers lower interest rates, thus reducing costs. Furthermore, companies can access this type of financing even in situations where they might have difficulty obtaining it through normal channels.

Supporting research, development and innovation are the goal of numerous subsidized finance programs, through which companies are encouraged to invest in innovation. Tax credits and other types of tax deductions are among the benefits included in these opportunities.

With subsidized finance, the financial risk for a company can be reduced by providing guarantees or risk sharing. In this sense, this procedure becomes an integral part of the business economy.

How to access financial benefits and who can do so

Eligible interventions and expenses in subsidized finance may vary depending on the type of measure envisaged (non-repayable contribution, call for tenders or other), the area of ​​expertise or specific parameters.

Most of the grants and concessions included in subsidized finance are not to be considered as belonging to the category of personal financing, but are intended for micro, small and medium-sized enterprises. However, there is no lack of forms of support for startups or loans for female and youth entrepreneurship, for the sustainability and relaunch of a particular sector.

The important thing, during the application phase, is to correctly outline your business, specifying its size (micro, small, medium, large, cooperative, agricultural, etc.), sector (tourism, agriculture, trade, construction, etc.), type of expenditure to be sustained (innovation, investment, certification, etc.); geographical location (municipality, province, region). Based on the evaluation of the project, the appropriate call is identified, proceeding to the drafting of the business plan.

It should be considered that in fact, not all investments can be subject to facilitation. Furthermore, the expenses will always be considered net of VAT and may not cover 100%. In this regard, it is advisable to read the announcements carefully to verify that you are among the beneficiaries and that you possess all the necessary requirements.

The most popular tools of subsidized finance

The range of instruments provided for by subsidized finance is quite diversified. Here are the most common types:

• Non-repayable contributions: financing that does not have to be repaid and is granted as an incentive for the growth of certain sectors or projects. These funds are often provided by public institutions at national or regional level.
• Tax credit: it is an incentive for companies that invest in new capital goods, both tangible and intangible, useful for the transformation and technological and digital development of production processes.
• Guarantees and subsidized financing: some instruments provide for the granting of guarantees by public institutions or the stipulation of financing with advantageous conditions, such as subsidized interest rates or extended repayment periods.
• Calls (European, national, regional): are public notices through which projects worthy of funding are selected. They can concern a wide range of sectors (energy from renewable sources, culture, tourism, etc.).
• Tax incentives: tax incentives are benefits that allow companies to reduce their tax burden through tax credits, tax deductions or tax exemptions on certain activities or investments.