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Business loan guarantee

With the loan guarantee of KredEx it is possible to guarantee investment and working capital loans, leasing transactions and bank guarantees.

Loan guarantee helps first of all:

  • if it is difficult to evaluate the amount of the guarantee property of an entrepreneur, or it is not sufficient for issuing of a bank loan
  • if an entrepreneur is only starting his operations or has a short credit history
  • if an entrepreneur expands his operations to new areas of activity
  • if an entrepreneur operates in a field of economy with a high risk level
     
Principles of loan guarantee?

The loan recipient takes the primary responsibility for the loan, guaranteeing the loan with his property and/or that of third persons, and/or a personal surety. In case of surety, KredEx will take second responsibility. That means that if a business plan fails and the businessman will not be able to manage his/her loan, the loan guarantee property shall be disposed at first. The guarantee of KredEx shall be realised, if the income obtained from the realisation of guarantee property is not sufficient to fulfil the claims of the bank.  

 

Conditions of loan guarantee
 
Terms and conditions for a loan applicant
  • the entrepreneur is creditworthy
  • equity capital meets legislative requirements
  • the company has no overdue postponed debts to credit establishments and regarding state taxes, and the obligation of submission of tax declarations according to the tax legislation has been duly fulfilled
  • the entrepreneur undertakes the primary responsibility, pledges the guarantee property, establishes mortgage, and/or gives the bank or the leasing company personal surety for returning of the loan/leasing/bank guarantee.
Extent of the KredEx guarantee
  • up to 75% of the loan or guarantee amount or the unpaid purchase price of leasing property without VAT
  • up to 75% of the purchase price of leasehold, net of VAT
  • up to 75% from loan or guarantee limit
  • the maximum guarantee amount for small and medium-sized enterprises is EUR 2 million
  • the maximum guarantee amount for big enterprises is EUR 1,5 million 
  • the guarantee amount decreases proportionally with the decreasing of the loan/leasing amount
Guaranteed loans  Loan
  • investment loan
  • working capital loan
  • overdraft
  • multiple-use loan limit

 Bank guarantee and bank guarantee limit

  • payment guarantee
  • prepayment guarantee
  • offer guarantee
  • performance guarantee
  • warranty period guarantee
  • letter of credit

 Leasing

  • capital lease and sales-purchase transaction with deferred payment
  • leasing limit
Recommended financial figures of the loan applicant
  • EBIDTA/long-term obligations are at least 1.2 (all loans and leases are considered in finding the factor)
  • liquidity coefficient (current ratio) is at least 1.1
  • the share of equity capital in the balance sheet is at least 10%
Contract fee  
  •  1 % of the guarantee amount
Guarantee amount*
  •  Loan and leasing
  • starting from 1.7% of the guarantee balance per year
 
  •  Bank guarantee
  •  starting from 0.4% of the guarantee balance per year

* The exact amount of the guarantee fee depends on the risk level of the project

 
Generally, KredEx guarantees a new loan, bank guarantee or leasing transaction. KredEx prefers to guarantee projects as a result of which the operations of a company are expanded, new jobs created or export grows.

No guarantees are issued to the following activities and organizations:

  • primary production of agricultural products, fishery and aquaculture and forestry
  • weapon, coal and tobacco industry
  • acquisition of means of transport and devices used in road transportation of goods
  • loans to finance working capital by retail and wholesale traders
  • real estate project development for hire and sales purposes. If real estate development is carried out for own (incl. activities non-related to affiliated and related enterprises) purposes, some of the premises will be allowed to let, provided that the payments of rent, except from affiliated and related enterprises, do not exceed 30% of the yearly turnover of the loan applicant
  • guarantee of investment loan and leasing shall not be issued to entrepreneurs of steel sector and synthetic fibre section
  • 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 the payment of taxes according to the legislation
  • there are off-shore companies among the owners of the loan applicant
  
 
How and where to apply?

The guarantees of KredEx are offered by the majority of banks operating in Estonia. To obtain a guarantee, a bank or a leasing company submits a relevant application to KredEx. The processing of a guarantee of up to 400 000 euros usually takes 1 week, a guarantee of 400 000 - 800 000 euros 2 weeks, and for larger amounts 3-4 weeks.

For additional information, please contact KredEx customer managers by phone 6674 100 or e-mail address arikliendid[at]kredex.ee. The application can be filled here.

In the event of a guarantee application for a working capital loan, overdraft and bank guarantee, as well as refinancing of earlier investment loans, the loan applicant shall submit a state aid notice according to the state aid regulations. A large entrepreneur shall submit the above described notice regardless of the type of loan guarantee received.
 
NB! Services offered by KredEx may include state aid, including aid with small significance.


Enterprise loan guarantees issued under Enterprise loan state guarantees and capital loan program is in 2007-31.08.2015 being financed by the European Regional Development Fund in the amount of 17 985 299 euros.

 

Hobujaama 4, 10151 Tallinn, Estonia              kredex[at]kredex.ee  +372 667 4100