Repayable financial assistance is a form of public support in which funds are provided temporarily and must be repaid according to an agreed repayment schedule, generally interest-free or at a significantly reduced interest rate. It differs from a grant precisely in the obligation to repay, and from an ordinary loan in the absence of profit for the provider and milder collateral requirements. It is used to bridge a lack of liquidity, to pre-finance projects, or as a crisis-support instrument. The advantage over market conditions is nonetheless counted as state aid – the value of the interest saved is expressed as a gross grant equivalent and counted towards the de minimis limit. For a company it is an interesting alternative where it does not qualify for a grant but can repay the investment from future revenue.
See also: De minimis aid scheme, Combination of a grant and a loan, Financial instruments.
