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On May 29th the Amendment to the Support of Enterprise and State Loan Guarantees Act took effect. The Act increases the total sum of effective state-secured loan agreements issued by KredEx and allows also corporations to use of additional guarantees when applying to banks for loans. Earlier KredEx offered loan guarantees only for small and medium-sized companies as in the conditions of steady economic growth this type of companies needed most stimulation for development. In the new situation all the companies should be covered with guarantees and also big corporations need support as they have an important role to play both in the expansion of economy and also in the employment. According to the head of KredEx Mr. Andrus Treier so far KredEx was not able to provide guarantees for companies that had more than 250 employees or which belonged to a group of bigger companies where the number of employees or the consolidated financial indicators exceeded the limits set for small or medium-sized companies. “At the same time many of the companies operating in Estonia are relatively small, which in turn influences their export capability. The export capability of bigger companies is better and that is the reason why their success is especially important in the current context of the country's economy," he added. The Amendment to the Support of Enterprise and State Loan Guarantees Act allows KredEx to secure bigger amounts of loans to more companies compared to the former situation. The current limit to the sum of the business loans security agreements was raised from 800 million EEK to 1.5 billion EEK. “It is important to raise the limit as by the end of April KredEx had 841 million EEK in its portfolio together with the applications under process and the issuing of securities should have been stopped as soon as the limit was reached“ said Mr. Andrus Treier. Additionally, already in March the possible limit per company was raised by the board of KredEx, allowing issuing the securities on loan, lease and bank guarantees in the amount of 30 million EEK instead of the former amount of 16 million EEK. The bigger amount of state securities on loans issued by KredEx allows the companies to get turnover and investment loans more easily. This in turn helps them to maintain business and makes it easier to invest into reorganization of production. The passing of the Amendment to the Support of Enterprise and State Loan Guarantees Act forms a part of the state business support package
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