During the pandemic, many non-bank companies began preparing offers to assist businesses affected by the coronavirus.
Some companies have already officially introduced assistance programs for borrowers who lost their sources of income during the epidemic and are unable to repay loans. These programs also provide opportunities to obtain business loans in Poland aimed at supporting entrepreneurs who, due to the pandemic, face financial and mortgage difficulties.
Credit Companies in Poland: Recommendations and Requirements for Operations
The Association of Financial Companies (ZPF – Związek Przedsiębiorstw Finansowych) and the Fund for Financial Development of the Republic of Poland have prepared recommendations related to the epidemic. Credit companies in Poland are required to provide deferrals of financial obligations for clients affected by Covid. The rules apply to about 80% of the Polish banking loan market.
The recommendations require non-bank firms to adjust their lending terms to new economic conditions. (The ZPF proposals presented below are not mandatory.)
Main Point – Suspend the installment of loans.
Additional Proposals from ZPF:
- Reduction of principal debt and interest payments for up to 2 months, with an extension of the contract period (with the possibility of further extensions).
- Suspension of the payment of principal debt or the main interest for up to 1 month, depending on the type of financial product (with the possibility of an extension).
- Postponement of loan repayment dates with the potential for an extension of the contract term. The borrower can apply for a postponement of the repayment date, for example, for 3 months. Later, their contract may be extended for three months.
- No interest for late payments if the individual has overdue payments (from the date of application and for the period agreed with the client). Example: A borrower is paying an installment of 5000 PLN annually. According to the contract, they had 12 monthly payments of 260 PLN and missed the last payment. Now they can negotiate full payment without penalties for the overdue payment.
All decisions presented by ZPF require agreement and consultation with each credit company in Poland.
Criteria for Borrowers to Receive Assistance
The above actions can be implemented for clients who, as of February 29, 2020, had no delays in credit payments. The application must be justified. The borrower must prove that their financial situation changed due to the pandemic (e.g., lost their job, had to suspend business operations). In most cases, attaching a mortgage contract is not required. Obligations according to the new schedule and extended repayment terms must be confirmed in writing. According to the ZFP decree, credit companies, upon request, must provide prompt intervention and review the application (without charging fees or commissions for these actions).
For the full safety of both parties, the receipt and processing of applications for suspension or deferral are carried out without personal contact between the lender and the borrower. All contacts occur by phone or email. The only condition is that the lender can fully identify the client.
Offers from Polish Non-Bank Companies
According to the Anti-Crisis Shield Law adopted on March 31, 2020, non-interest expenses on loans up to 30 days cannot exceed 5%, and for installment loans for a longer period, they can reach a maximum of 21%. This significant reduction in the upper limit of non-interest expenses could mean the collapse of many commercial companies. It is a severe blow to the only legal competition against banks or credit unions.
Despite these challenges, some lenders are adapting their requirements not only to the government’s demands but also to the needs of clients who lost their main source of income due to coronavirus and now do not want to go into debt using a business loan in Poland. The simplest solution for such individuals is a temporary deferral of loan and interest payments.
Each case must be considered individually and then approved by the debt collection department of the specific non-bank organization.
Official ZPF Website Below are the credit companies in Poland and their offers for entrepreneurs affected by coronavirus:
- Wonga – Offered monthly credit holidays. Additionally, if the debtor was supposed to repay the loan in one lump sum, they can distribute the repayment over 12 months without additional costs. For clients reporting financial problems due to COVID, lower initial payments can be set for the first three installments during the 12-month payment period. Payment deferral is activated within 48 hours after confirmation of the request.
To apply for monthly credit holidays as part of the installment plan, the person should not have debts. Those with overdue debts are offered the above-mentioned options.
All financial procedures can be organized online. In some cases (if possible), the borrower may attach documentation confirming their difficult financial situation. However, this is not a mandatory condition for receiving assistance.
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Miloan – Provides the opportunity to reduce interest and late payment fees. The lender considers each case individually, depending on the situation. When establishing terms related to loan repayment, Miloan does not impose additional requirements on the borrower. Permanent information about age, Polish citizenship, bank account number, place of residence, and fixed income is required.
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Alpha Finance and its subsidiary Tani Kredyt are also accommodating clients during these difficult times. Lenders have introduced options for extending the loan repayment term by up to 30 days. They have adjusted their pricing policy in accordance with the special act “Anti-Crisis Shield 2.0.”
Under the Cheap Credit program, you can take out a loan of up to 7,000 PLN from these lenders, while fees and commissions will be adjusted according to the special act. Each decision will be made individually, and its legality will be reviewed by the debt collection department of Alpha Finance. All formalities can be resolved by phone, contacting the customer service department.
- Smartney – Offered various solutions tailored to the needs of clients affected by coronavirus. They developed a very specific assistance program that applied rules in accordance with the recommendations of the Association of Financial Enterprises (ZPF). Currently, Smartney offers:
- Suspension of debt collection activities (excluding late payment penalties) for an agreed period of up to 21 days;
- Loan repayment deferral for one month;
- Reduction of installments;
- Cancellation of late payment penalties for clients who make payments after the deadline due to delays related to the consequences of the coronavirus pandemic.
All applications are considered individually, following the ZPF guidelines and Polish law. It should be clearly emphasized that they will only be considered for borrowers who had no payment delays before February 29, 2020, and whose difficult financial situation is related to the pandemic. Many factors influence a positive decision, including the current financial position of the borrower, their financial state in the past, and future scenarios.
As we can see, the Polish government is trying to support entrepreneurs by involving both banking and commercial organizations in this process. Even during the crisis, there is an opportunity to get a business loan in Poland or obtain an installment plan for loan repayments.
If you are planning to move to Poland and start a business, now is a good time for it. The Uniconsulting team will help you navigate the intricacies of Polish entrepreneurship.
