KredEx to begin offering capital loans to companies under more favourable conditions
KredEx is offering a capital loan to entrepreneurs, targeted towards growth companies whose business model has proven to be successful and who are planning on investing in development and increasing their operational volume.
“A capital loan is helpful if the company wishes to finance its activities with a loan, but the level of self-financing is too small or the collateral insufficient for obtaining a bank loan. Similarly to the owner, KredEx will give capital into the use of the company, which due to its subordination increases the volume of self-financing in the eyes of other financiers. This in turn enables the inclusion of additional funding, e.g. a bank loan,” said Andrus Treier, CEO of KredEx.
The general amount of a capital loan is up to EUR 2 million, but not exceeding the company’s equity at the moment of disbursement of the loan. Capital loan interest is usually between 8–15%, with the final rate of interest depending on the risk level of the company, the project, and the provided collateral. When compared to the subordinated loan offered by KredEx so far, the maximum limit of a capital loan is higher and the interest rate lower.
“While private investors are funding growth companies with subordinated loans starting from EUR 2 million, then the objective of the state is to contribute to the development of smaller companies, whose capital need is below EUR 2 million. KredEx does not get involved directly with the management of a company that has taken a capital loan, but certain compliance regulations are set and a place on the supervisory board is presumed,” added Treier.
KredEx must be contacted in order to apply for a capital loan. More information is available from the web page of KredEx and our client executives.