At first glance, the changes may appear to represent a tightening of the programme, but the situation is more nuanced. According to the Hungarian Development Bank (MFB), the applications of a total of 168 companies were reviewed from financial, economic, operational and business security perspectives. Of these, 145 companies fully met the requirements. The programme’s resources will therefore be adjusted to reflect this group of companies that are in fact eligible for financing.
At the same time, there is also a particularly favourable change from the applicants’ perspective: the investment period will be extended by four months. This provides more time for transactions that have already been prepared and assessed as eligible to reach the contract-signing stage.
The decision also indicates that the programme is increasingly focusing on genuinely viable and financially sound investments. In other words, a development idea alone is no longer enough: the company’s operational background and the business rationale of the investment also play an important role in the financing decision.
The Demján Sándor Equity Programme is therefore not being discontinued; instead, it will continue with a more targeted focus on a narrower group of companies. The current amendment may be particularly favourable for those applicants that have already been deemed eligible, as the extended investment period provides more opportunity for their planned investments to actually secure financing.
What should companies seeking funding pay attention to?
The review of the Demján Sándor Equity Programme goes beyond the modification of a single financing scheme. It also highlights the importance of preparing for external financing in a deliberate and timely manner.
The success of an application or financing request often depends on more than just one criterion. For example, it is important that the purpose of the investment can be presented clearly, that the necessary financial data are available, and that the company can properly substantiate the expected results of the development.
For this reason, companies planning to raise equity, secure a loan or apply for funding in the near future should put the background of their project in order even before a specific financing opportunity arises. A well-considered business plan, realistic financial projections, a clear presentation of the expected return on the investment and the preparation of the necessary documentation can make the financing process significantly smoother.
The current changes therefore also offer a useful lesson for companies that did not apply for the Demján Sándor Equity Programme. A good investment idea on its own is not always sufficient: what also matters is how well prepared, transparent and convincing the company is in presenting its project.
For more information or consulting, please fill in our contact form.