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Start-up loan
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What is a Start-up loan?
With the help of the KredEx guaranteed Start-up loan, it is possible to finance investments and working capital of starting businesses and those small and medium-sized enterprises that have been active up to three years as well as self-employed persons, enabling fast growth and development. Start-up loan enables a entrepreneur to manage the business- and loan-related risks, as in comparison with ordinary loans they have to take smaller risks with their own property.
How does Start-up loan help?
Above all, a Start-up loan will help the company, who has just started or has a short credit history and whose collateral assets are difficult to estimate, or they are not sufficient for banking loan. If a entrepreneur has a good business idea but lacking additional financing or guarantee, then Start-up loan will help.
What are the principles of providing a guarantee?
Entrepreneur has first responsibility over the loan, providing personal surety to 30-40% of the amount of loan. In case of guarantee, KredEx will take secondary responsibility. If a business plan fails and the entrepreneur will not be able to manage his/her loan, his/her surety will be disposed at first.
What are the loan conditions?
| Conditions for a recipient of loan | - Companies with up to 250 employees and self-employed persons, if they were registered in the commercial register less than three (3) years ago.
- Annual turnover up to 782 million EEK and/or annual balance sheet total up to 672 million EEK.
- Equity capital meets legislative requirements.
- No entrepreneur or owner has overdue debts due to credit institutions or postponed tax arrears due to Tax Board.
- There are no off-shore companies among the company owners.
| | Guarantees | - Solidary personal surety - 30-40% of amount of loan - of company natural person owners.
- KredEx guarantee: 75% of amount of loan.
| | Guaranteed loans | - Earmarked investments or financing of circulating capital.
- Term: up to 60 months.
- Amount of loan: 30,000 – 1 000,000 EEK
- One applicant can apply for a loan up to 1 000,000 EEK.
- Payment relief up to 6 months, but not more than half of the length of the loan period.
- Refinancing is not permitted.
- 10% self-financing of the project in investment loans.
| | Fee for the provision of guarantee | - 0,5 % of amount of loan, upon conclusion of contract. In addition, loan contract fee will be charged by the bank.
| | Loan interest | - Loan interest (incl. KredEx guarantee fee) will be determined by the bank. Estimated interest: 7,5-12%.
| | Contract alteration fee | - 0,2 % of loan balance. In addition, banking fees may apply.
| | Documents to be submitted by loan applicant | - Start-up loan application on the KredEx/Enterprise Estonia form.
- Business plan with the answers to the following questions:
When was the company founded, its form of business, size of equity capital?
Who are the owners, management and employees, their knowledge and experience necessary for respective business?
Description of the business idea, product or service to be provided, its differences from competitors, development goals?
Who are the biggest and most important customers, suppliers and cooperation partners (by name)?
How will the product/service will be marketed to customers?
Cost of the planned project and overview of financing. - In case of existing business activity, audited annual reports from previous financial years (if audit is required), and balance sheet and income statement of the last quarter of the accounting year.
- Existing permits and licenses.
- ID-card of the company legal representative.
- Finance prognosis for 3 years.
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KredEx will not provide guarantee to:
• Agriculture, fishery, and forestry management (primary sector production) loans.
• Real estate project development loans for sales and rental purposes. If real estate development is carried out for own purposes, it is allowed to rent out some of the premises. In that case, rental incomes may not exceed 30% of the loan recipient's annual turnover.
• Military and tobacco industry loans.
• Loans for obtaining transport vehicles for companies offering road transport services (incl. passenger transport services).
• Loans to finance circulating capital by retail and wholesale traders.
• Non-profit associations and public sector loans.
How and where to apply?
In addition to Enterprise Estonia, a start-up loan can directly be applied for at banks as well. It is possible to obtain free business plan consultations from the consultants of regional entrepreneurship centres. 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.
For additional information, please contact KredEx customer manager by phone +372 6 819 950 or e-mail: arikliendid kredex.ee. Application can be completed here.
Duration of guarantee processing: up to 35 working days. The programme of guaranteeing the starting and microloans is being financed during the years 2008-2013 from the European Social Fund in the amount of 94 080 000 kroons.
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