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A start-up entrepreneur and an entrepreneur who has been active up to 3 years can apply for a start-up loan with the guarantee by KredEx for 1,000,000 kroons instead of the 500,000 kroons so far. 500,000 kroons of this amount can be used for both investment and working capital financing, an amount over 500,000 kroons will only be available for investments. Unlike a typical loan product, it is sufficient for an entrepreneur to establish a personal surety as a guarantee, covering 30-40% of the amount of the loan. Kredex gives its own surety to the rest of the amount that is not guaranteed. According to Mr Lehar Kütt, Head of Enterprise and Export Division of KredEx, a major hindrance in starting an enterprise can be missing guarantee necessary for banking loan or the lack of operational history. “For a good starting position, a start-up entrepreneur can use a start-up loan with the Kredex guarantees which will significantly enhance finance opportunities and support the rapid growth of start-ups. The start-up loan also allows to manage the risks associated with starting up business as the entrepreneur’s personal liability is limited to 30-40% of the amount of loan,“ said Lehar Kütt. In addition to Enterprise Estonia, a start-up loan can directly be applied for at banks as well. A bank or Enterprise Estonia 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 and Swedbank. The prerequisite for receiving the loan is the existence of a business plan. If necessary, it is possible to obtain free consultations from the consultants at the county development centres. Together with a start-up loan, it is also possible to apply for start-up aid at Enterprise Estonia. Start-up loans with guarantees by KredEx have been issued since March 2008. Within the period, it has been decided to finance the projects of 75 start-up entrepreneurs in the total amount of 28 million kroons. Most entrepreneurs use start-up loans to start up or expand their activities, invest in fixed assets and enter foreign markets. Further information can be obtained at Enterprise Estonia, county development centres, banks or the KredEx website at www.kredex.ee/stardilaen. The start-up loan programme is financed from the European Social Fund.
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