At the initial stage of a company’s development, attracting the necessary capital can be challenging. In this situation, personal savings or a consumer loan may not be sufficient. This creates the need to look for alternative sources of funding for companies in Poland. Below are nine ways to secure additional financing for businesses.
What Business Looks Like in Poland — Taxes, Economy, Facts, You Can Read About in This Article https://uniconsulting.group/blog/biznes-v-polshe/
European Union Subsidies
Between 2014 and 2020, entrepreneurs and local government authorities were the largest recipients of European Union funds. Over the course of seven years, €20 billion was allocated for business development, including subsidies for businesses in Poland.
Five key funds support the economic growth of all European Union countries in line with the objectives of the “Europe 2020” strategy, namely:
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European Regional Development Fund: Its goal is to reduce disparities between regions within the Union and strengthen the economic, social, and territorial cohesion of the Community as a whole. The organization supports manufacturing and infrastructure investments, as well as small and medium-sized enterprises (SMEs).
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European Social Fund: The primary goal is to combat unemployment in the member countries. Its funds enhance employment and training opportunities. It co-finances support for various regions and social groups, people at risk of poverty, and young people entering the labor market.
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Cohesion Fund: This is for member states with a Gross National Income (GNI) per capita below 90% of the EU average. Its aim is to reduce economic and social inequality and promote sustainable development, mainly through large investments in transport and environmental infrastructure.
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European Agricultural Fund for Rural Development: This fund supports the transformation of the agricultural structure and the growth of rural areas.
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European Maritime and Fisheries Fund: This fund supports the restructuring of the fishing industry in the member states.
Additionally, the Union has introduced four financial instruments:
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JASPERS and JASMINE: These funds provide technical support for preparing large infrastructure projects.
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JEREMIE2: This fund facilitates access to microfinancing for SMEs.
- JESSICA2: This fund supports urban development.
The European Union outlined its strategic goals and development priorities in the “Europe 2020” strategy. Based on this, the so-called horizontal policy was established, which regulates EU funding programs. Each project carried out with the involvement of EU organizations is assessed for its compliance with three main policies:
Sustainable Development — applications for subsidies that are not related to economic growth at the expense of the environment are rated higher. Rational and economical use of natural resources and environmental protection through the reduction of gas emissions or the spread of environmentally friendly technologies.
Equal Opportunities — enterprises co-financed by the European Union must comply with the policy of equal opportunities. This means ensuring equal treatment of men and women. Discrimination based on age, views, origin, religion, or disability is not allowed.
Information Society — the implementation of the information society policy involves the spread of modern information technologies in the daily life of citizens, businesses, and government agencies.
“Erasmus+” Program
In addition to the aforementioned funds, the Union allocates special resources for the period 2014-2020 for new programs that provide additional support in various areas:
“Horizon 2020” aims to stimulate expertise in research, support international cooperation, innovative companies, etc. (€80 billion),
“COSME” Program is aimed at facilitating access of SMEs to markets both inside and outside the Community, as well as providing easier access to grants through credit guarantees and equity capital (€2.3 billion),
“Connecting Europe” will become a crucial tool for subsidizing strategic investments in infrastructure for road, rail, and energy networks, as well as ICT development (€33 billion),
“Erasmus+” is an EU funding program aimed at facilitating internships abroad for young people, which will enhance their skills and expand employment opportunities (€15 billion),
“Creative Europe” Program will receive more subsidies for European culture, cinema, television, music, literature, theater, heritage, and other related fields (€1.5 billion).
“COSME” Program
Funding for Starting a Business from the Employment Office
A small portion of the social security contributions is directed to the Labor Fund, which is one of the sources of subsidies for businesses in Poland and Europe as a whole. Grants are intended for the unemployed registered with PUP (Powiatowy Urząd Pracy – County Employment Office). However, in order to apply for a grant for starting a business, the applicant must meet several conditions:
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Within the 12 months prior to the application date:
- The applicant has not been engaged in business activities and has not been registered in CEIDG (Centralna Ewidencja i Informacja o Działalności Gospodarczej – Polish Central Business Register);
- The applicant was registered as unemployed, has not refused (without valid reasons) a job offer, training, internship, professional preparation, or has not terminated (due to their own fault) any training, internship, public work, or other forms of assistance;
- The applicant has not received grants from the employment service or other state funds for starting a business;
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The applicant has not been convicted for a trade-related crime within the 2 years prior to the application date;
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There are no outstanding social security contributions from previous business activities or tax arrears with the tax office;
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No debts or obligations exist in banks or other financial institutions (if they are not being regularly repaid);
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The applicant has not applied for grants at another employment office.
An unemployed person wishing to apply for funding to start a business in Poland must submit a complete and correctly filled application (including a business plan for the future activity) within the specified deadlines.
Funding for Companies in Poland from Financial Institutions
A few years ago, the situation for new firms seeking subsidies from banks was not very promising. Financial institutions require entrepreneurs to provide evidence and offer guarantees or collateral related to their assets, which is typically impossible for startups.
Currently, there are two types of loans available on the market: those with mortgage coverage and unsecured loans. In the case of the former, the advantages include higher co-financing amounts and lower costs. However, the borrower must have their own property, which may be problematic for new businesses.
For unsecured loans, the main limitation is the loan amount, which is significantly lower than in the case of a mortgage loan. Additionally, the short loan repayment term may make it difficult for small businesses to make large payments.
At present, two types of loans are available on the market: mortgage-backed and unsecured.
Subsidies for Companies in Poland from Local Government
The local credit fund is an institution of local government, created in each commune participating in the “Local Government Poland” project. Its main goal is to provide loans to entrepreneurs registered in the given commune and offer ongoing support through the construction of institutional facilities that support newly established enterprises.
Venture Capital and Direct Investments
EU funding programs also include venture capital and private equity funds, which invest in the private capital market. These funds can be used for the development of new technologies or increasing working capital. The financial contribution is made at the early stages of company development and is mainly used for startup purposes.
These two terms (venture capital and private equity) are often used interchangeably, although there are differences between them. Venture capital is associated with investments in smaller, riskier projects, while private equity investments are generally aimed at longer-term investments lasting several years.
Investment Funds for Startups
Here is a list of companies that make venture investments in launching new projects:
Smok.vc — software and games.
Bvalue.vc — E-commerce, marketplace, B2B SaaS, fintech.
Moc.vc — SaaS, marketplace.
Aipseed.com — general direction.
Speedupgroup.com — artificial intelligence, fintech, medicine, SaaS, Industry 4.0, Big data.
Xevin.eu — technology and media, fintech, martech, artificial intelligence, SaaS, marketplace.
Blackpearls.vc — Big data, artificial intelligence, biotech, fintech, medtech.
Innovationnest.co — invests in B2B software development companies at an early stage.
Beesfund.com — crowdfunding company.
Evf.com.pl — SaaS, e-commerce, marketplace.
Fidiasz.com — fintech, bio-agro, alternative energy sources, building materials.
Innoenergy.com — accelerating innovation in sustainable energy.
Innovationhub.innogy.com — energy technology.
Inovo.vc — technology companies.
Tdjpitango.com — Big data, artificial intelligence, medical equipment, mobile technologies, digital media.
Mci.pl — digital technologies.
Akceleratorgliwice.pl — IT, artificial intelligence, electronics.
Alfabeat.com — B2B, SaaS.
Aperventures.com — medtech, IT, IoT.
Booster.bitspiration.com — artificial intelligence, biotech, fintech, medtech, IoT, Big data.
Blackswanfund.pl — fintech, IT, e-commerce, marketplace, digital publications.
Bldg.vc — IT, AR/VR, new materials, robotics, automation.
Cobinangels.com — IT, telecommunications, energy, biotechnology, e-commerce.
Corvus.vc — general direction.
Edtechhub.eu — educational technology.
Enerfund.pl — energy, smart cities.
Erc.vc — Big data, smart homes, electric vehicles.
Invest.arp.gda.pl — technology projects.
Innoventure.vc — medtech, artificial intelligence, IoT, logistics.
Kogito-ventures.com — e-commerce, fintech, blockchain, e-mobility, SaaS.
Lumainvestment.eu — data science, technology projects.
Mantaray.vc — technology projects.
Midven.co.uk — B2B, games.
Origintfi.com — technology projects.
Pibir.pl — new materials, industrial solutions, transport, electronics, cybersecurity, artificial intelligence.
Vfe.vc — Industry 4.0, IoT, artificial intelligence.
Shape.vc — robotics, automation, healthcare, manufacturing technologies.
Simpact.vc — social impact, environmental impact.
Younickmint.com — healthcare, Industry 4.0.
Searching for Investors Abroad
Some people wish to develop Polish businesses, while others want to have a business in Poland. They have capital and are ready to invest in a promising project. Currently, a common request from our clients is help in finding foreign investors. There are individuals in Poland who are ready to run a business and manage it, and they need a partner willing to invest financial resources, become a co-founder, and have a stake in the business. These kinds of partnerships also work.
EU Financing in Poland from the “Heavens” — Business Angels
A wealthy person who allocates their own capital to fund early-stage projects is called a “Business Angel.” Through their investment, they acquire a minority stake in the company.
The growing group of investors is now concentrated in so-called business networks, which allow them to remain anonymous. Since angels invest their private capital, the decision to enter a business is made completely independently, based on subjective reasons.
“Business Angels” are individuals on what is called a business pension. They are interested in supporting fresh, innovative projects for reasons other than financial gain, such as participating in economic development or wanting to establish business contacts.
Business Incubators and Accelerators
A business incubator is an institution aimed at supporting and expanding businesses. It is built around three main goals:
- Supporting entrepreneurial startups
- Supporting youth and students
- Supporting social entities.
Business incubators were originally designed to eliminate economic inequality in specific regions. Over time, their scope expanded with the emergence of new assumptions. Technological incubators emerged, focusing on creating new jobs and increasing competitiveness.
Bonds as Part of the EU Funding Program
Bonds are a type of loan (or credit) where the issuer is the borrower, and the bondholder is the creditor. The main difference between bonds and other grants is their form as a security, with the terms defined by the issuer. Thus, setting its own rules for repaying obligations is a more advantageous form of financing than, for example, a loan. This option is typically used by large firms with stable income and a solid financial standing.
In conclusion, financing for companies in Poland is one of the main concerns of every entrepreneur. Depending on the size of the company or its organizational form, there are various chances to receive the necessary funds. If you are interested in EU subsidies for your business, leave an application on our website, and UniConsulting specialists will help you choose the right program for your activity.
