Family businesses can be supported from three different bank´s programmes based on their needs. They can apply for an investment loan from the EXPANSION-LOANS programme. They can also apply for a bank guarantee from the EXPANSION-GUARANTEES programme, which can secure commercial working-capital loans. Finally, they can apply for a GEN-GUARANTEE, which was designed to enable the handover of the business from its founder to next generations or even to new external owners.
To apply in any of these three programmes, family businesses must be certified and registered in the Register of family businesses. Registration is administered by the Association of Small and Medium-Sized Enterprises and Crafts of the Czech Republic (AMSP ČR), register is published on the BusinessInfo portal of the Ministry of Industry and Trade. As of December 2020, the number of registered family businesses has exceeded four hundred. Libor Musil, Vice-Chairman of the Board of Directors of the AMSP ČR and sponsor of its “Family business” project explains: “It makes sense to support family businesses. Financial support to family business remains here in Czechia. Moreover, owners of family businesses are used to rely on themselves and they are likely to seek for the support from the state only if they really need it. From our point of view, programmes of the ČMZRB are an example of fast and very efficient form support to family businesses.”
Family business is defined as a business entity where majority of associates are members of one family and at least one of them is a member of its statutory body. Similarly, if members of one family have directly or indirectly majority of shareholder´s rights and at least one of them is a member of a statutory body, such business can be considered as a family business. Alternatively, family businesses can be owned by a sole person, who is a member of a statutory body, upon condition that any other family member is either a member of a statutory body, an employee, a procurator, or a member of a supervisory body. Company fulfils the definition of a family business also in the case that the majority of shareholders´ rights are exercised for a benefit of one family through a trust fund, but only if at least one of the family members is either a member of a statutory body, or a fund manager. Finally, self-employed persons can also be considered a family business if at least one other family member regularly participates on its activities.
Family businesses are an important engine of economy. It is estimated that they represent approximately 70% of global GDP. Role of family businesses is extremely important in less industrialized regions, particularly in southern Europe (Portugal, Spain, Italy), but also in Austria. Analyses shows that more than 25% of owners of family businesses are more than 70 years old. However, transfer of family businesses from one generation to the next one seems to be a general problem across Europe. It is not surprising that it has recently become an important topic for national promotional banks and institutions. NPBIs in Malta and Belgium are pioneers of new guarantee instruments aiming to facilitate such transfers. ČMZRB joined this field in April 2020. Targeted support for family businesses is offered in both of our two flagship programmes – EXPANSION and GUARANTEE 2015-2023. Although the current coronavirus crisis shifted the priorities of most of Czech enterprises, we noticed a growing interest of family businesses for financing – both “standard” loans/guarantees and new guarantees for the transfer of family businesses. As of November 2020, almost fifty family businesses have applied for preferential financing from the ČMZRB.