Loan guarantee

Purpose

A loan guarantee is useful if a company wishes to use a bank loan, a lease or bank guarantee but lacks sufficient collateral or operating history to be issued a loan.

NB! KredEx surety can only serve as an additional guarantee for a new obligation (bank loan, lease transaction or bank guarantee).

For who?

Laenukäendus

starting enterprise
established company
exporting company

Service is suitable if

  • the company is creditworthy and
  • the company’s equity capital meets the requirements set forth in the Commercial Code (KredEx may make exceptions if the company was registered less than 3 years ago) and
  • the company does not owe state taxes and has no debt to credit institutions.

Important conditions

Loans will not be issued for the following activities or to the following companies:
  • Primary production of agricultural products, fishing and aquaculture and forest management;
  • Manufacture, processing and marketing of tobacco (and related products);
  • Acquisition of vehicles and equipment for road freight transport;
  • Acquisition of vehicles and self-propelled machinery on the basis of an authorization for issuing a guarantee on behalf of KredEx;
  • Financing of circulating capital for retail and wholesale companies;
  • Enterprises engaged in financial and insurance activities
  • real estate development projects for sale and rental purposes. If the real estate is developed for the purpose of activities unrelated to the real estate development, including that of subsidiaries and affiliates, it is permitted to rent out part of the premises, provided that the rental income, except from subsidiaries and affiliates, does not exceed 30% of the loan applicant's annual turnover:
  • Export-related activities that are directly related to quantities to be exported, establishing and operating a distribution network or other current costs stemming from export activity if the issuing of the guarantee constitutes de minimis aid;
  • Guarantees related to payment of taxes arising from legislation;
  • Decommissioning or establishing nuclear power plants;
  • Investments for reducing greenhouse gas emissions generated in the fields listed in Annex 1 of directive 2003/87/EC8
  • Investments into airport infrastructure other than in a case where the investments are related to environmental protection or investments related thereto are necessary for alleviating or reducing the unfavourable environmental impact of airport infrastructure;
  • Companies operating in the field of gambling;
  • The objective of financing is to use domestic products instead of imported products;
  • Fields related to pornography, illegal data downloading and illegal access to data networks;
  • Research and development in the field of healthcare with the aim of cloning humans or developing genetically modified organisms for scientific or medical purposes.
Amount of guarantee:

Small or medium-sized enterprise: up to €25,000,000

  • Additional conditions apply to guarantee amounts over €5,000,000
  • A credit risk of more than €10,000,000 per enterprise can be taken if the foundation can use reinsurance

Large enterprise: up to €2,250,000.


Additional conditions apply for enterprises in the case of credit risk of over €5,000,000

  • The financed project has one of the following objectives:
    • to increase export potential,
    • to increase the efficiency of energy and material use,
    • to start using renewable energy,
    • to automate activities;
  • The financed investment complies with the principles of sustainable investment
Extent of guarantee

If the foundation's credit risk per enterprise is up to €5,000,000:

  • Up to 80% of the obligation, with the exception of up to 60% for the construction sector.

If the foundation's credit risk per enterprise is between €5,000,000 to 10,000,000:

  • Up to 50% of the obligation
  • If the foundation can use reinsurance, the extent of the guarantee is up to 70% of the guaranteed obligation, with the exception of up to 60% for the construction sector

If the foundation's credit risk per enterprise is between €10,000,000 to 25,000,000:

  • Up to 60% of the obligation

The amount of the guarantee decreases as the amount of the loan or lease decreases.

Guarantee fee:
  • For an investment loan, working capital loan, overdraft, revolving credit limit (RCL), leasing and bank guarantee 0.8 to 3.8% of the guarantee balance per year
  • For a bank guarantee limit 0.5% to 3.8% of the guarantee balance per year
Contract fee:

The fee depends on who draws up the decision to grant the guarantee and the guarantee contracts

  • bank:
    • 0.5% of the amount of the guarantee, min EUR 30
  • KredEx:
    • 0.5% of the amount of the guarantee, minimum €30 for guarantees of up to €520,000.
    • 1% of the amount of the guarantee for guarantees over €520,000.
Fee of contract change and early termination

The bank decides on the amendment of the guarantee and drafts the guarantee contract:

  • 0.20% of the balance of the guarantee, minimum €30, if the reason for changing the contract is to increase the guarantee and the obligation secured by it.
  • In other cases, there is no fee.

The foundation decides on the amendment of the guarantee and drafts the guarantee contract:

  • 0.20% of the balance of the guarantee, minimum €30. 
  • In the case of changes to technical conditions that do not increase the risk of the contract or to conditions that do not have economic content or are insignificant, the fee for changing the contract is calculated as follows:
    the amount or balance of the guarantee
  • up to €50,000: standard contract change fee;
  • over €50,000: €100 + 0.002% of the guarantee amount or balance.


In case of early termination of the contract, the fee is 1% of the balance of the guarantee, minimum €30. The fee is charged if the guaranteed obligation remains valid even after the end of the foundation's guarantee contract

The loan applicant’s recommended financial indicators:
  • The debt-service coverage ratio (DSCR) should be at least 1.2 after the issue of the loan, according to conservative estimates
  • Current ratio of at least 1.1
  • Equity capital makes up at least 20% of the balance sheet volume after the obligations to be assumed

Good to know

  • The services provided by KredEx may include state aid, including de minimis aid.
  • Find out more about Enterprise Estonia’s services for businesses here

Application process

Contact a bank or leasing company to utilize the loan guarantee. To obtain the guarantee, the bank or leasing company will apply to KredEx. Depending on the guarantee amount and the complexity of the project, the guarantee decision may take up to four weeks.

If necessary, KredEx will contact you

Contact us

Jaak Tikko

Jaak Tikko

Client Manager

jaak.tikko [at] kredex.ee
Tiina Kalme

Tiina Kalme

Client Manager

tiina.kalme [at] kredex.ee
Argo Suurkask

Argo Suurkask

Client Manager

argo.suurkask [at] kredex.ee
Marek T

Marek Tiivel

Client Manager

marek.tiivel [at] kredex.ee