Enterprises in rural areas can now apply for a regional loan


KredEx launched regional loans as a new service to make it easier for undertakings outside Tallinn and Tartu to obtain loans from banks to finance investments. The regional loan allows for partial or full financing of the necessary self-financing.

Small and medium-sized enterprises outside Tallinn and Tartu, which are not active in agriculture, forestry, or aquaculture, can apply for the regional loan from banks. The loan will help those businesses that do not have the funds to meet the self-financing required by banks.

According to Andres Sutt, Minister of Enterprise and Information Technology, the State needs to encourage entrepreneurship in areas of market failure and keep the economy active. ‘Over the last two or more years, the State has offered companies various measures to help them survive crises and uncertain times, to ensure liquidity and development. The regional loan will help smaller companies with development potential that operate outside the capital, by enabling them to obtain bank loans through co-financing,’ said Sutt.

Kaarel Aus, Head of the Entrepreneurship Department of the KredEx and Enterprise Estonia joint organisation, added that the loan is aimed at sustainable undertakings that want to invest in the expansion or restructuring of their operations. ‘The regional loan is available to solvent and sustainable small and medium-sized enterprises. It could be a long-established company or a start-up that wants to invest, for example, in export, diversification of production, or expansion of its activities,’ commented Aus on the purpose of the loan.

To apply for a loan, an undertaking must go to a bank to get a decision on whether they can be granted a loan or a lease. Then, they can already apply for a regional loan together with the bank. The loan amount can be up to EUR 500,000, but may not exceed 50% of the cost of the project.

The term of the loan is up to 15 years and there is no contract entry fee. For up to 20% of the project funding, the interest rate on the regional loan is the same as the bank’s interest rate, with the interest rate increasing as the proportion increases. Separate collateral is not required for the regional loan.

In addition to agriculture and aquaculture, some business sectors, such as forestry, property development and the acquisition of means of transport for freight transport, are excluded when applying for the regional loan.

Entrepreneurs in the agriculture, forestry and aquaculture sectors can still access loans and guarantees through the Estonian Rural Development Foundation.

The regional loan is financed from the structural funds of the European Union.

KredEx will present the terms of the regional loan on 7 April from 10.00 to 11.00 at an Estonian language webinar. Additional information on the terms and conditions, applying and the webinar is available HERE.