What is a Start-up loan?

With the Start-up Loan with KredEx guarantee it is possible to finance the investments and circulating capital of starting small and medium-sized enterprises and self-employed entrepreneurs, as well as of those having operated for up to 3 years. To manage larger risks connected with starting of entrepreneurship, the liability of an entrepreneur by personal property is limited with the terms of the Start-up Loan.

How does Start-up loan help?

Above all, a Start-up loan will help the company, who has just started or has a short credit history and whose collateral assets are difficult to estimate, or they are not sufficient for banking loan. If a entrepreneur has a good business idea but lacking additional financing or guarantee, then Start-up loan will help.
  
 What are the principles of providing a guarantee?

The loan recipient and its owners, who are physical persons, undertake the primary responsibility under the loan agreement. The amount of personal surety of the physical owners of the loan recipient is only 30%-40% of the loan amount, provided that the use of the loan for the intended purpose is documented. The guarantee of KredEx is 75% of the loan amount not returned to the bank. The liability of KredEx is additional to that of the loan recipient and the owners of the loan recipient.

What are the loan conditions?

Conditions for a recipient of loan	Companies with up to 250 employees and self-employed persons, if they were registered in the commercial register less than three (3) years ago. Annual turnover up to EUR 50 million and/or annual balance sheet total up to EUR 43 million. Equity capital meets legislative requirements. No entrepreneur or owner has overdue debts due to credit institutions or postponed tax arrears due to Tax Board.
Collaterals	If the use of the loan amount for the intended purpose is documented, the joint and severable personal surety of the physical owners of the loan recipient is 30%-40% of the loan amount. The joint and severable personal surety of the physical owners of the loan recipient is 100% of the loan amount, if the loan is not used for the intended purpose or the use of the loan for the intended purpose is not documented. The guarantee of KredEx is 75% of the loan amount not returned to the bank.
Guaranteed loans	Earmarked investments or financing of working capital. Term: up to 60 months. Amount of loan: EUR 2000 - 64 000 Payment relief up to 6 months, but not more than half of the length of the loan period. Refinancing is not permitted. 10% self-financing of the project in investment loans.
Fee for the provision of guarantee	0,5% of amount of loan, upon conclusion of contract. In addition, loan contract fee will be charged by the bank.
Loan interest	Loan interest (incl. KredEx guarantee fee) will be determined by the bank. Estimated interest: 7,5-12%.
Contract alteration fee	0,2% of loan balance. In addition, banking fees may apply.
Documents to be submitted by loan applicant	Start-up loan application. Business plan with the answers to the following questions: When was the company founded, its form of business, size of equity capital? Who are the owners, management and employees, their knowledge and experience necessary for respective business? Description of the business idea, product or service to be provided, its differences from competitors, development goals? Who are the biggest and most important customers, suppliers and cooperation partners (by name)? How will the product/service will be marketed to customers? Cost of the planned project and overview of financing. In case of existing business activity, audited annual reports from previous financial years (if audit is required), and balance sheet and income statement which are not older than two months. Existing permits and licenses. Finance prognosis for 3 years.

 

KredEx will not provide guarantee to:
 

• Primary production of agricultural products, fishery and aquaculture and forestry loans.
• Real estate project development loans for sales and rental purposes. If real estate development is carried out for own purposes, it is allowed to rent out some of the premises. In that case, rental incomes may not exceed 30% of the loan recipient's annual turnover.
• Weapon, coal and tobacco industry loans.
• Acquisition of means of transport and devices used in road transportation of goods.
• Loans to finance working capital by retail and wholesale traders.
• For activity connected with export directly related to exported quantities, creation and operation of distribution network or other current expenses based on export, if state aid is provided by issuing of guarantee.
• Guarantees connected with payment of taxes based on the legislation
• Owners of the loan applicant include off-shore companies registered in tax-free areas

How to apply?

Start-up loan can directly be applied for at banks. It is possible to obtain free business plan consultations from the consultants of regional entrepreneurship centres. A bank will process the application and submit it to KredEx for decision-making. The start-up loan will be issued by a bank on the basis of the positive decision by KredEx. Start-up loans are currently processed and issued by Eesti Krediidipank, Marfin Bank, SEB Bank, Swedbank and Nordea Bank.
 

For additional information, please contact KredEx customer manager by phone +372 6 67 4100 or e-mail: arikliendid[at]kredex.ee. Application can be completed here.

Duration of guarantee processing: up to 35 working days.

The programme of guaranteeing the starting and microloans is being financed during the years 2008-2013 from the European Social Fund in the amount of 6 012 807,81 euros.