The borrower must first contact our Financial Partner, (a bank, a leasing company or a venture capitalist) in order to present the project and the type of funding requested. In case of approval by the Financial Partner, the request for financing is submitted to SOTUGAR.

Project funding (through loans or equity shareholding) under different guarantee mechanisms administered by SOTUGAR is carried out on the basis of a guarantee application fully completed and signed by the borrower and presented to SOTUGAR by the Financial Partner.

In addition to the guarantee application, SOTUGAR reviews other documents related to the file of the funding sought, i.e. the feasibility study, the business plan and other documents required by the Financial Partner, due to the nature of the project and the activity sector (Investment declaration, the notification of incentives, location) as well as all other documents likely to facilitate the processing of the application. Once SOTUGAR has completed its review and determined that the application meets the eligibility criteria for extending a guarantee, a guarantee for the financing shall be issued for the benefit of the Financial Partner.

Once the application for a guarantee, accompanied by all necessary forms and supporting documents have been received, it will undergo a thorough review process by SOTUGAR, namely with respect to the economic and commercial viability of the proposed project. The application review is carried out all the faster if there is a good cooperation between the Financial Partner and SOTUGAR.

In general, the decision-making process takes up to two (2) weeks.

SOTUGAR charges a guarantee fee called ” Recipient’s Contribution ” which varies according to the type of funding requested. This guarantee fee is as follows :

• A 6% interest rate per annum on the amount of medium- and long-term loans or an equivalent lump sum calculated at a rate ranging from 0.9% to 2.6% of the loan;
• 1% for authorized short-term facilities;
• 3% for equity

SOTUGAR shares investment-related risks with its Financial Partners by assuming a coverage ranging from 50% to 75% of the amount of financing accepted as eligible to the guarantee mechanism (in accordance with the methods of intervention of the different guarantee mechanisms run by SOTUGAR).

The different guarantee mechanisms are based on the following:

• The different Guarantee mechanisms benefit from collaterals taken or pledged in connection with the granting of credit, in proportion to their assumed share of risk.
• In the event of recovery by the financial institution of a loan previously deemed non- recoverable, the guarantee mechanism is entitled, in proportion to the risk share, to the proceeds from a ‘better fortunes’ clause in respect of such recovery.
• The guarantee covers only part of the principal eligible for coverage, excluding interest, which means that the partner lending institution always assumes part of the risks inherent in the financing granted.
• Indemnification by the guarantee mechanism in respect of irrecoverable receivables shall be affected only after the intervening financing institution has had recourse to the real and personal guarantees lodged.
• The maximum outstanding risk assumed by the guarantee systems per company or group of companies may not exceed the ceilings set by the laws and regulations in force.