Companies Can Raise Capital on the Bulgarian Stock Exchange With 90% of Costs Covered

Bulgarian small and medium-sized enterprises can now apply for funding that covers up to 90% of their costs for preparing and raising capital through the stock market. The Bulgarian Stock Exchange (BSE) and the Bulgarian Small and Medium Enterprises Promotion Agency (BSMEPA) have officially launched the application process for the program, which has a budget of nearly 1 million euros.

It was announced back in April, but at that time the specific rules and application deadlines had not yet been published. Companies can now submit their applications, and the project is designed to support approximately 20 companies over the next three years.

The idea is to use public funding to cover some of the costs that typically make going public or raising capital difficult for smaller companies. The support covers not only the IPO itself but also the preparatory work leading up to it – from legal and accounting consultations to the prospectus, presentations to investors, and fees paid to regulatory agencies.

Not Just for Major IPOs

Companies will not necessarily have to pursue a traditional initial public offering on the regulated market. The program offers three options – the BSE’s regulated market, the BEAM growth market for small and medium-sized enterprises, and the SpaceCrowd crowdfunding platform.

This is a significant difference for smaller businesses. While listing on a regulated market involves a more complex procedure and higher costs, BEAM was created specifically as a more accessible market for growing companies. SpaceCrowd, on the other hand, involves equity financing by attracting a large number of investors.

On a regulated market, eligible service costs can reach 60,000 euros including VAT. For BEAM, the limit is 35,000 euros, and for SpaceCrowd, it is 25,000 euros. The Bulgarian Small and Medium Enterprises Promotion Agency (BSMEPA) can reimburse up to 90% of these costs.

Thus, the maximum support effectively amounts to 54,000 euros in the regulated market, 31,500 euros for BEAM, and 22,500 euros for SpaceCrowd.

The funds are reimbursed if the capital is raised

There is, however, an important detail: the company must first incur the expenses, and reimbursement comes after the capital has been successfully raised.

For the regulated market, the minimum amount of successfully raised capital is 350,000 euros. For BEAM, the threshold is 200,000 euros, and for SpaceCrowd, it is 100,000 euros.

The company has 12 months to achieve this result in the regulated market, and 9 months for BEAM and SpaceCrowd, starting from the signing of the relevant agreement with an investment intermediary or advisor.

Thus, the program does not simply fund preparations for a potential future IPO. Public funds are tied to tangible results – the company must actually succeed in raising capital.

What the Program Covers

The list of eligible expenses is broad. Companies can receive support for legal, financial, and accounting services, as well as consulting services; a preliminary assessment of readiness for listing; corporate restructuring; and the preparation of the necessary documentation.

Funding is also provided for the preparation of a prospectus or listing application, assistance with the public offering, and presentations to potential investors.

This also includes expenses for an information and marketing campaign – including investor presentations, a website, branding, and promotional materials.

Through SpaceCrowd, companies can receive support for business valuation, pitch decks, financial statements, market analysis, and growth strategy, as well as for the key information document.

Who Can Apply

Bulgarian micro, small, and medium-sized enterprises that are registered as businesses and have no outstanding public obligations to the state are eligible to participate in the program.

Excluded are enterprises engaged in the primary production of fishery and aquaculture products, as well as the primary production of agricultural products.

Applicants must also submit a set of documents, including financial statements, information on ownership and capital, declarations regarding the enterprise’s legal status, and other documents as applicable.

When are the deadlines?

Applications must be submitted using a qualified electronic signature via the b2bconnect.bg platform.

The deadlines vary depending on the selected market:

• October 15, 2027 – for the regulated market;
• January 15, 2028 – for BEAM;
• January 15, 2028 – for SpaceCrowd.

The program is part of the procedure “Facilitating Access to Equity Financing for SMEs to Support Their Sustainable Development and Competitiveness” under the “Competitiveness and Innovation in Enterprises” Program for 2021–2027.

For Bulgarian businesses, this is yet another attempt to make the capital market a more accessible alternative to bank loans. For the government, the program’s success will be measured not so much by the nearly 1 million euros disbursed, but rather by whether, in three years, there will be about 20 new companies on the Bulgarian Stock Exchange that have succeeded in attracting real private capital.

Translated with DeepL.