BNDES is the national Development Bank and is placed among the largest banks of this kind in the world. Among the projects that BNDES supports are the development and innovation within technology. In this article we will outline the main areas and forms to obtain financing from this institution.
BNDES is a federal public company which approved, in 2015 alone, BRL 136 billion in loans directed to all segments of the economy to strengthen businesses in Brazil, on the social, environmental and regional levels.
Even though the institution is viewed as an investment bank that mainly focuses on infrastructure projects and grants massive loans to large companies, technology companies of all sizes can also apply for loans through BNDES to take advantage of beneficial interest rates, often the lowest possible on the market. Among the programmes that are most relevant for the technology segment are BNDES Prosoft Empresa, BNDES Soluções Tecnológicas and Finame - Bens de Informática.
BNDES Prosoft Empresa
This is a programme that finances investments up to BRL 1 million, and is intended for companies headquartered or with presence in Brazil. This programme is aimed towards companies with the following profiles:
- Software development and related services. This category includes custom-made and off-the-shelf software development, software components, consulting, testing, integration or implementation, training, outsourcing and qualified support
- IT services. This category comprises investment in data centers and IT Enabled Services Business Process Outsourcing, such as call centers and contact centers
There is a variety of items that can be financed through this programme, including equipment and software acquisition, given that goods are produced in Brazil and the supplier is registered with BNDES. BNDES also accepts importsof new products or equipment, with no similar national, as long as the payment does not imply international money transfers. Renovation of facilities, certification, acquisition of SaaS, R&D, internationalisation, auditing and corporate restructuring activities can also be accepted as investments by BNDES under this programme.
BNDES sets limits for their participation on the investment project depending on the item to be financed, with a minimum of 50% and a maximum of 90%.
As other financing lines provided by BNDES, Prosoft Empresa offer competitive rates compared to other banks in Brazil. The interest rate index is defined by the type of financed item and in some cases is set to be 7.5% per year, plus 1% per year charged by BNDES. There is also an added rate charged by the institution that acts as intermediate for the financing, which are agreed between the client and the institution. These institutions are often regular banks, like Banco do Brasil, Itaú, Bradesco etc.
BNDES Soluções Tecnológicas
BNDES Soluções Tecnológicas is a product that facilitates the acquisition of technology solutions that are ready, and are viable to market, financing automatically the acquisition of solutions of up to BRL 20 million. One of the main intents of this programme is to increase the number of suppliers for technology solutions in the Brazilian market and therefore the loans are only approved if the solution is acquired from one of the suppliers accredited by BNDES.
The definition of technology solution is relatively broad and includes applications or know-how intended to support creation, modification or improvement of a product or process within a company. Per definition, services on its own are not understood to be technology solutions, only if delivered in conjunction with an application or a set of supportive tools.
In order to enable a technology solution, BNDES also includes financing other items to the programme, given they are linked to the technology solution acquired:
- Implementation, expansion, modernisation or rehabilitation of facilities or infrastructure of companies and institutions. All renovation processes including training can be financed
- Production or acquisition of new machinery or equipment including utility vehicles, buses, trucks and aircrafts, produced locally by a supplier accredited by BNDES
- Goods, inputs, services and software
- Working capital
- Export of goods or services
- Acquisition of imported goods, with no similar national
For the Soluções Tecnológicas programme, BNDES sets their own rates based on the size of the company. For micro and small companies, BNDES rates are 1.6% and for medium and large companies, the rate is 2% per year. The BNDES rates are added to the interest rates indexes used as standard by BNDES, called TJLP, which will be defined by the size of the company contracting the loan, plus the rates that are charged by the bank that acts as intermediary for the financing.
The maximum participation of BNDES on the acquisition is also defined by the size of the company, set to 70% for micro and small companies and 50% for medium and large companies.
This programme requires guarantees which are negotiated with the bank, but for micro, small and medium companies that do not have guarantees to offer, it is possible to apply for BNDES FGI. BNDES FGI is an investment guarantee fund. The payment terms is up to 5 years with a grace period of up to 2 years.
BNDES Finame - Bens de Informática
Finame is a financing line available for companies that need to acquire machinery and equipment. Within the list of equipment that Finame finances are IT and automation equipment, which must be acquired from suppliers accredited by BNDES. In order to be accredited by BNDES, the supplier must prove that a set of production steps of the product were completed in Brazil and the quota of local content for the product is met.
BNDES can have a participation of up to 80% on the acquired equipment, and the interest rates can either be fixed or variable according to standard market rates. Added to the interest rate, are BNDES charges which are between 1 and 1,3 % per year, and the intermediate institution responsible for the management of the loan will receive about 3% a year, but this amount is negotiated directly with them.
For Finame - Bens de Informática, the payment terms is up to 5 years with a grace period of up to 1 year. The loans contracted under this programme are guaranteed by the financed assets, and can be complemented if necessary.