KredEx together with banks begins providing companies with long-terms loans

 

The cooperation between KredEx and banks are based on terms similar to those of ordinary bank loans but allow for a repayment period between 2-10 years. The maximum size of a loan is about EUR 1.9 million per enterprise. The target group for this program is companies with an operational history of at least 3 years, export revenue of at least EUR 500 000 and not less than 20% out of total revenue. Preferably the companies work with more than one export client. Smaller exporters are excluded since the total loan volume in the program is capped at a little over EUR 25 million and larger companies are expected to have a bigger economic and social impact for the country.

 

Today, on May 18th KredEx signed a contractual framework for providing these long-term loans with UniCredit Bank’s Estonian branch. Negotiations to offer long-term loans are under way also with other banks and contracts will be signed shortly.

 

„Due to the uncertainty in the economy and the conservative stance of financial markets receiving long-term financing is a problem for businesses. Therefore many sustainable investment projects with a significant impact for the Estonian economy could be left undone,“ said Andrus Treier, manager of KredEx.

 

„At the same time companies are in need of additional cash due to the decrease in factoring- and credit limits and unfavourable terms in settling accounts. To soothe these issues KredEx together with banks is beginning to offer long-term loans to business,“ he added.

UniCredit Bank Estonia branch manager Taavi Laur said that to obtain long-term credit one should turn to UniCredit's office and that the applicant must meet regular standards for qualifying for a loan.

 

"Being one of Europe's largest and far-reaching banks, our focus in Estonia has been on financing exporting companies in the past as well. Therefor we've enjoyed an excellent cooperation with KredEx and we are very pleased that with the help of the Estonian state we can continue supporting companies here with even better terms and conditions," said Laur.

 

Loans can not be issued for the following activities: agriculture, fishing, forestry, arms- and tobacco industry, purchasing of transport vehicles and equipment to be used in highway transit, cashflow of wholesale and retail companies, real estate development projects for sale or rent. The program is being financed from the European Regional Development Fund facilities.

 

Offering companies long-term loans through a cooperation of KredEx and banks is part of the state support package for exporting businesses. In the capacity of the package, KredEx also provides companies with progress-based subordinated loans, starting from the beginning of April 2009.