Thanks to a loan granted by BNP Paribas Bank Polska S.A of around EUR 1.7 million under the ERDF co-financed Biznesmax guarantee, Huras Konstrukcja i Budowa Maszyn sp. z o.o. (‘Huras’), a globally active family-owned company manufacturing machinery and specialised equipment in Nowa Wieś Legnicka, Poland, was able to develop and grow – even during challenging times.
In early 2020, as the world navigated unknown territory of the COVID-19 outbreak, Martin Huras, CEO of Huras, was investing some EUR 2.3 million to strengthen the position of his family business within the manufacturing industry. Around EUR 1.7 million of this investment was financed thanks to the European Regional Development Fund (ERDF) co-financed Biznesmax guarantee.
The Biznesmax guarantee, described in a soon to be published fi-compass case study, secures 80% of the loan while the loan covers ca. 74% of the investment costs. The loan helped to fund the construction of an additional production hall and a connector to the existing premises, an internal power line for plots and an external water, sanitary and rain sewage system.
Despite worldwide shortages and inflation affecting the supply chain, construction was completed in just over a year, with architectural design and construction services provided by local companies.
The success of Huras’ investment is thanks to a loan of around EUR 1.7m granted by the Legnica branch of BNP Paribas Bank Polska S.A., one of the lending banks of the ERDF co-financed Biznesmax guarantee instrument.
“In the last 30 years, we have overcome many challenges. Each one of these made us stronger and bolder”, declared Martin Huras in September 2022 at the opening ceremony of the new 2 300 square meter production site.
Thanks to this investment, Huras, employing around 100 locals, was able to grow and expand its business. The recruitment of the additional staff members, mainly engineers and employees with specific technical qualification, is ongoing.
Huras is a global competitor when it comes to manufacturing specialised machinery for automated production lines, especially in the automotive, telecommunication and medical sectors. Customers of Huras include WAGO, a large German manufacturer of components for electrical connection and decentralised automation technology as well as interface electronics. Other customers include big names such as Siemens and 3M.
“3M ordered three units of our flagship product, the 5-ton servo press machine, for their Irish factories producing medical equipment. Our servo press punches steel parts which are then placed in inhalers”, says Marek Zalewski, Vice-President of Huras, highlighting how the company’s products also helped in the fight against COVID-19.
“Our new production hall is a chance for us to move forward, to grow. It is a guarantee of maintaining a strong position within the market during these difficult times. It is also an opportunity for us to establish new partnerships and expand our production to innovative locomotive technologies”.
Martin Huras, CEO of Huras
Financial instruments – keep it simple
SMEs are the backbone of the Polish economy. One of Poland's main development goals is the transition to a low carbon economy through energy efficiency and increased use of renewable energy sources. Poland aspires to increase research and development (R&D) expenditure of enterprises and shift to an innovation-based growth. EU Cohesion Policy resources in the 2014-2020 programming period aim to address these main development gaps and thus strengthen social, economic and territorial cohesion.
The Biznesmax guarantee is a result of the successful collaboration between the Ministry of Development Funds and Regional Policy in Poland as the managing authority of the ERDF 2014-2020 ‘Smart Growth’ Operational Programme and Bank Gospodarstwa Krajowego (BGK, the Polish national development bank) as the financial intermediary. This financial instrument is a portfolio guarantee to boost the development of innovative entrepreneurs and green projects in SMEs in Poland and is provided to a number of lending banks that successfully applied to participate in the instrument.
A key feature of Biznesmax is that the guarantee is combined with an interest rate subsidy. The benefits of the guarantee include:
- Final recipients benefit from lower financing costs due to reduced interest rates as a result of the guarantee, which has been made available to the lending banks under the condition that the financial benefit of the guarantee is fully transferred to the final recipients
- An additional feature of the instrument is that final recipients can receive an interest subsidy on top of the loan covered by the guarantee. This subsidy can refund the final recipients a major part of the interest paid during the first three years of lending
Initially, the scope of Biznesmax’s support covered loans for investment projects of innovative entrepreneurs (‘innovation path’). In 2019, a new support path was created to focus on green investment projects in SMEs with a measurable environmental impact in areas such as circular economy, electro mobility, renewable energy and energy storage (‘green path’).
In addition, the Biznesmax guarantee was able to react promptly to the evolving needs of SMEs in Poland following the pandemic. The scope of support was extended to include the possibility of financing liquidity needs of enterprises, alongside the measures already in place to support investments. This was possible thanks to the managing authority and BGK swiftly making use of the new flexibilities of the Coronavirus Response Investment Initiative (CRII) and Coronavirus Response Investment Initiative Plus (CRII Plus). Moreover, the support through Biznesmax has been greatly appreciated by SMEs in Poland, who have been facing new challenges related to the conflicts in Ukraine since early 2022, such as increasing energy prices, inflation, higher interest rates, and export market changes.
Huras qualified to benefit from the Biznesmax guarantee by meeting 1 of the 17 innovative entrepreneur criteria for the ‘innovation path’ under Biznesmax. Over the last 5 years, the company carried out a green investment – it installed a photovoltaic farm next to the production hall consisting of two rows of panels (160 pieces overall) with a capacity of 50 kWh.
Check out this video of how Huras’ investment project received support from the ERDF Biznesmax guarantee.
Watch the full video case study about Biznesmax here.
Financial backing that answered the company’s needs in changing times
“We learned of the Biznesmax guarantee in 2020 through our contact at BNP Paribas Bank Polska S.A., and applied for the investment loan in 2021. The loan secured through Biznesmax was a real added value for us considering the current situation on financial markets”, says Martin Huras, while he goes on to say: “The loan process went smoothly in accordance with relevant procedures. This only confirms the high quality of the services provided by BNP Paribas Bank Polska S.A.”.
BNP Paribas Bank Polska S.A. has been a financial partner of Huras for some time. “In the end, the client received an investment loan, secured by a free guarantee, as well as an interest subsidy for the loan under Biznesmax. For the company, this type of support was optimal due to the possibility of refinancing part of the interest through the subsidy, which was crucial for such a large project”, says Edyta Mochnacka, Director of the SME Business Center at the Legnica Branch of BNP Paribas Bank Polska S.A. The bank accompanied the company in all steps of the financing process for the investment. To successfully finalise such an investment, it requires both parties to work hand in hand in all procedural steps.
Financed thanks to the Biznesmax guarantee, the production hall was built with a roof designed to bear the weight of a larger photovoltaic system - the next step and green investment planned for Huras. Furthermore, the company plans to install a heat pump soon. “Renewable energy sources are a top priority for our company. We also strive to have our entire car fleet powered by green energy in a few years’ time. In our opinion, this is the right direction to go, especially in the context of the global energy crisis”, Martin says.
He hopes that these new investments will enable him to produce a significant amount of the company’s energy needs and, as a result, become even more competitive on the global market. The future looks bright for this rising innovator from Lower Silesia in Poland.
Biznesmax Guarantee Fund in Poland: main success factors
A unique feature of the financial instrument is the combination of the guarantee with the interest rate subsidy under one single operation. The interest rate subsidy reduces the cost of financing for SMEs significantly, increases their creditworthiness and improves the conditions for obtaining a bank loan.
Hence, this type of support has encouraged a wider group of SMEs, traditionally reluctant to use debt (or other types of external financing) to explore the possibility of financing investment with bank loans.
A robust governance between the various actors (managing authority, BGK as the body implementing the guarantee instrument, and the lending banks, who would disburse the guaranteed loans among the SMEs) has also been key to the successful implementation of the financial instrument and underlying loans.
Finally, as it is the case for all ERDF financial instruments, good cooperation and proactive knowledge sharing between BGK and the lending banks is of paramount importance for the success of the instrument.
