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Assessment of your financial capacity

For some participants, we will also have to check the financial capacity before awarding grants/contracts.

For grants, the criteria for checking financial capacity are set out in the call conditions.

Normally, the financial capacity assessment will be done for all Beneficiaries and Affiliated Entities, except:

  • public bodies (entities established as public body under national law, including local, regional or national authorities) or international organisations
  • if the individual requested grant amount is EUR 60 000 or below.

Specific rules apply for some programmes (i.e. only for coordinators; only for grants above a certain threshold; State guarantee; see Horizon Europe Programme Guide, Erasmus+ Programme Guide).

The Central Validation Service will contact you during grant preparation to upload the necessary financial documents (My Organisations > Actions > Modify Organisation).

The documents required will be listed in the notification you receive. In general, you will need to provide documents showing your financial situation for the last two closed financial years (profit and loss account and balance sheet, business plan, audit report produced by an approved external auditor, certifying the accounts for the last closed financial year, etc.)

The analysis is based on neutral financial indicators (liquidity, financial autonomy, solvency and profitability), but will also take into account other aspects, such as dependency on EU funding and deficit and revenue in previous years. The results of your financial capacity assessment will be taken into account when evaluating your ability to implement the project (and to take on the Coordinator role, if it is the case).

If we consider that your financial capacity is not satisfactory, we may require:

  • an enhanced financial responsibility regime, i.e. joint and several liability for all Beneficiaries or joint and several liability of Affiliated Entities
  • prefinancing paid in installments (multiple/additional prefinancing)
  • (one or more) prefinancing guarantees

or

  • propose no prefinancing or
  • request that you are replaced or, if needed, reject the entire application.

Specific rules apply to programmes with Mutual Insurance Mechanism (MIM, former Participant Guarantee Fund; e.g. Horizon Europe). For these programmes, prefinancing guarantees and joint and several liability of Beneficiaries are normally excluded.

Financial capacity self-check

You can check your financial capacity yourself by using the Financial capacity self-check simulator.

(warning) The self-check is not available for all programmes (because of the algorithms used).

Moreover, it is only a simulation. If a formal financial capacity assessment is required, you will have to go through the formal procedure.