De Minimis Aid for Businesses: How It Works

Fonduri ajutor de minimis pentru afaceri, cum funcționează?
Fonduri ajutor de minimis pentru afaceri, cum funcționează?

De minimis aid funds are one of the most accessible forms of non-repayable financial support for businesses. They are designed to support SMEs, start-ups, and other economic entities that need a boost for development.

What is de minimis aid, in fact?

De minimis aids are forms of non-repayable financial support granted to companies, without exceeding a ceiling of EUR 300,000 over a period of three consecutive fiscal years. Due to their relatively low value, they are not considered to distort competition on the internal market. Their main advantage is that they do not require notification to the European Commission, which significantly simplifies the granting process. This ceiling applies at the level of a single undertaking, meaning that all affiliated companies or companies with the same majority shareholder must be considered together. The ceiling applies per undertaking, not per project. The maximum amount of non-repayable funding for a project depends on the specific conditions of each de minimis aid scheme. Unlike large grants, these funds do not require complex bank guarantees and have more accessible eligibility criteria.

An important aspect is the cumulation rule, according to which a company may not exceed the mentioned ceiling even if it receives funding from multiple programs. This rule ensures fairness and prevents excessive accumulation of support by certain companies.

Who can benefit from de minimis aid?

The de minimis aid mechanism is designed to support a wide range of economic entities, with a particular focus on small and medium-sized enterprises (SMEs). Categories of beneficiaries include, but are not limited to:

  • SMEs - small and medium-sized enterprises that need capital for investments or business consolidation.
  • Start-ups - newly established companies seeking support for initial investments.
  • NGOs with economic activity - non-profit organizations carrying out revenue-generating activities.
  • Sole traders, family enterprises, and authorized natural persons (PFA) - small structures operating in various fields, from services to production.

Each category has certain specific conditions, but the general rules are the same and aim to maintain balance and transparency in accessing funds. It should also be noted that there are sectors, such as road freight transport, where the ceiling is lower, and some sectors, such as fisheries and aquaculture, have specific rules or are excluded.

How does the mechanism work?

The process of accessing de minimis aid can be seen as a sequence of logical steps:

Identifying a de minimis aid funding program

The funds are granted through national or European authorities, depending on the available program. These may be managed by ministries (e.g. the Ministry of Economy, the Ministry of Development), government agencies, or other public entities.

Checking specific conditions

Each call for proposals has clear criteria, and the applicant must ensure that they meet the requirements. These conditions may include a minimum number of employees, minimum turnover, field of activity (NACE code), or other specific requirements.

Preparing the documentation

The required documents usually include business plans, financial statements, and declarations on own responsibility regarding previously received aid.

Submitting the application

The submission process is most often carried out online, via a dedicated platform.

Monitoring and reporting a de minimis aid

During the implementation of the project approved for funding, as well as after its completion, the beneficiary must report on how the funds have been used.

Find out more about how to obtain European funds in the form of de minimis aid.

Example of de minimis aid

The Ministry of Economy in Romania manages a de minimis aid scheme aimed at supporting the transition to the circular economy.

  • 15% co-financing from own resources, in a form that is not subject to any other public aid.
  • The maximum amount granted to a beneficiary from the scheme’s budget is the RON equivalent of EUR 200,000.
  • Payments are made in instalments, based on the supporting documents provided in the guidelines.

Advantages and limitations

De minimis funds are an excellent opportunity, but it is important to understand both their advantages and their limitations.

Advantages:

  • Simplified procedure compared to other grants.
  • Clear and easy-to-manage ceiling.
  • Can finance a range of useful investments, as long as cumulation rules are respected.
  • Non-repayable: the received amounts do not need to be repaid.

Limitations:

  • Relatively low maximum amount.
  • The cumulation rule may block access for companies that have already received other funding or that form a single undertaking. Strict records of all received de minimis aid must be kept.
  • Not all sectors are eligible.
  • High competition: the large number of applicants can make access to funds challenging.

Resources and recommendations

To ensure success in using de minimis aid funding, do not hesitate to seek support and rely on official information sources.

  • Accurate information: consult official government or ministry websites to stay up to date with the latest programs.
  • Rely on experts: a specialized consultant can help you navigate all stages and increase your chances of success.
  • Be ready to act: every step you take to prepare your application brings you closer to business success.

De minimis aids are a viable option for companies seeking accessible financial support. They do not solve all business challenges, but they provide a solid foundation for targeted investments and development.

Often, the lack of initial capital or development funds can prevent a business from reaching its full potential. This is where de minimis aid funds come in - a powerful and accessible instrument specifically designed to give small businesses a much-needed boost.

Tips and Advice

Have you checked whether your organisation fits the definition of a single undertaking before applying for de minimis aid? Make sure you take into account all links through shareholders, directors, and other relevant elements, in line with the official guidelines for classification as an SME. If you need support, you can use ILIGRA’s general analysis services.

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