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Tomorrow, a draft of State Support of Enterprise and State Loan Guarantees Act approved by Riigikogu on November 11th shall enter into force, which shall increase the limit of enterprise loan guarantees from 1.5 billion kroons to 2 billion kroons. Increase of guarantees by 500 million kroons enables banks to issue additional loans to approximately 250-300 enterprises in total volume of 830 million kroons. According to Andrus Treier, manager of KredEx, the amendment was approved at a right time.
“A need for additional enterprise loan guarantees has significantly increased in the past years. This year’s estimated volume of KredEx guarantees to enterprises is about 1 billion kroons. For example in 2008, the amount was only 365 million kroons,” Andrus Treier said.
According to Andrus Treier, the reason for the demand is first of all a decrease in the incomes of enterprises and insecurity due to the general economic environment, as well as the lower market value of guarantee property.
“Today, a bit of optimism can already be noticed in the economy," Treier added.
“The incomes of companies are increasing, entrepreneurs have courage to make new investments and to satisfy a larger demand, additional operating capital and bank guarantees are necessary. As figures show, KredEx has been and will be of significant help to many companies in carrying out projects with good potential,” Andrus Treier said.
According to Treier, the increase of the limit does not mean allocation of money to KredEx, but extended authorisations for issuing guarantees.
At the end of September, the guarantee portfolio of KredEx enterprise loans with offers totalled 1.3 billion kroons, increasing by 238 million kroons in 9 months. Mainly, additional guarantees are necessary for issuing investment loans, but there is also a great interest in guarantees of bank guarantees and overdrafts.
2010. In nine months of year 2010, banks issued enterprise loans with guarantee of KredEx for a total of 1.2 billion kroons to 294 enterprises, helping to preserve 8,600 and create 650 jobs. 72 new companies have been founded this year with the help of loan guarantees.
Loan guarantees are co-financed from the European Regional Development Fund.
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