The recent months of the fight against the pandemic have been a difficult time for everyone - also including the social economy entities. Due to the temporary lockdown of the economy and the restrictions, a number of them have faced difficulties in maintaining financial liquidity or paying remuneration.

It is also worth to note that the operations carried out by social economy entities do not focus solely on generating profit, but on helping others. This type of activity brings social benefit by employing and integrating persons with disabilities, homeless, seniors, i.e. people who face difficult life circumstances, at risk of social exclusion.   They include, for instance, non-governmental organisations, cooperatives of workers, persons with disabilities, social integration centres and clubs, vocational activity establishments, or occupational therapy workshops.

 

Support during the pandemic

Social economy entities may count on support under the Anti-Crisis Shield instruments. It allows to protect such important and valuable jobs, which are often a rescue and an opportunity for people at risk of social exclusion to regain back their lives.

Respectively, in the event of income losses on statutory activities of at least 30%, non-governmental organisations, as well as other entities running public benefit activities, (i.e. church legal entities, sports clubs) may apply for co-financing employee remunerations under the Labour Fund.

Until now, the support under this instrument was granted to approximately 16.3 thousand persons employed at non-governmental organisations. The total amount of support granted to non-governmental organisations currently amounts to PLN 70 million.

The application for co-financing may be submitted via Praca.gov.pl or directly at the district labour office.

Please note that similar instruments may be used not only by non-governmental organisations, but also by other social economy entities. If they run business activity, and are classified as a micro, small or medium entrepreneur, they can apply for co-financing for the salaries and contributions under the Labour Fund.

 

What support is available to the social economy entities?

Social economy entities running business activity can also access the Guaranteed Employee Benefits Fund.  In the case that the employer introduces economic idle time or reduces the working time, they can obtain co-financing for employee compensations. Co-financing under the Guaranteed Employee Benefits fund is available to social economy entities which have recorded a decrease of economic turnover (i.e. a qualitative or quantitative decrease in sales of products or services).

The applications for support under the Labour Fund may be submitted electronically through the Praca.gov.pl platform or traditionally on paper to the district labour office.

The support for entrepreneurs for protecting jobs granted under the Guaranteed Employee Benefits Fund is managed by voivodeship labour funds, as well as through Praca.gov.pl. Voivodeship labour offices also accept the applications of social economy entities which intend to use the new benefits for co-financing remunerations of employees not covered by the economic idle time or decreased working hours under the Guaranteed Employee Benefits Fund (Praca.gov.pl)

 

Loans for the third sector

Since June 24^th, non-governmental organisations and entities indicated in Article 3, item 3 of the Act on public benefit activity and volunteerism can obtain forgivable loans financed under the Labour Fund. Such solution was previously only available for micro-entrepreneurs, including social economy entities running business activity.

The new solution prepared for non-governmental organisations is a response to the requests of the third sector. Due to the loans, the organisations, including in particular those with lesser financial assets can now cover their liabilities more easily. The loan can be put towards covering the current costs related to statutory as well as commercial activity.

So far, over 5.8 thousand applications submitted by non-governmental organisations for the total amount of PLN 19 million have been positively assessed.

The brief application for financing may be submitted in the district labour office having jurisdiction over the registered seat of the organisation or via Praca.gov.pl.

 

That is not all

Companies from the social economy sector can count on support granted by other institutions. Entities conducting business activity or paid statutory activity (micro, small or medium-sized entrepreneurs) may apply for flexible loans under the National Social Entrepreneurship Fund.. Preferential loans issued by Bank Gospodarstwa Krajowego help to maintain financial liquidity and can be used to cover running costs (e.g. settlement of current liabilities, including public-law liabilities, costs of personnel employment, administrative costs, costs of purchase of small equipment). The maximum amount of the loan is 25% of the annual turnover, however it should not exceed PLN 100 thousand.

Loans are granted by Financial Intermediaries, appointed by BGK throughout the country. For more information, please visit the website of Bank Gospodarstwa Krajowego.

Importantly, the Financial Intermediaries responsible for granting start-up and development loans under the National Social Entrepreneurship Fund now have the right to offer numerous facilitations for new and existing loans (e.g. credit holidays, interest rate reductions, extensions of loan repayment period).

Social economy entities conducting business activity may also obtain support from the Polish Development Fund as part of the financial shield. The amount of the subsidy and the conditions depend on the size of the enterprise (micro, small and medium or large) as well as the registered decrease in the turnover. Detailed information is available at the website of the Polish Development Fund.

However, micro, small or medium enterprises from the social economy sector may also file applications to obtain support from the Industrial Development Agency. The support includes: working capital loans to finance remunerations, working capital loans to finance the working capital deficit, as well as operating lease with a grace period. Additional information is available on the website of the Industrial Development Agency.