As Novac writes on the 9th of July, 2020, the Croatian Bank for Reconstruction and Development (HBOR) has extended the repayment period of “COVID-19” working capital loans from three to five years in order to facilitate the operations of Croatian businessmen, according to HBOR.
“Due to the still difficult business conditions being experienced by Croatian businesses, and in order to facilitate business and the repayment of credit obligations, HBOR has extended the repayment period under the Working Capital Programme Measure ”COVID-19” to five years, including the possibility of using a grace period of up to one year,” reads the bank’s statement on the matter.
An interest rate as low as 0% on HBOR’s share in the loan
In addition to a longer repayment period, the advantage of this programme is the interest rate of 0% on HBOR’s share in the loan for the first three years of repayment (the interest rate depends on the regulations on the allocation of state aid). HBOR’s share in the loan isn’t subject to a fee for processing the request, nor is there a fee for reserving funds. Borrowers can be private and public sector entities but they both need to prove the negative consequences caused by the COVID-19 epidemic (meaning they need to obtain a COVID score). The request for these funds can be submitted to one of the fourteen banks with which HBOR has agreed cooperation under this particular programme. The lowest loan amount that can be requested from HBOR’s sources is 1 million kuna, and the second part of the loan is then approved from a commercial bank source. For loans larger than 37 million kuna, direct loan approval is possible.
Lower interest rates were provided through 8 banks
Business owners can also request favourable liquidity funds from HBOR sources through 8 banks with which this development bank concluded framework loan agreements back in May. In this way, 1.2 billion kuna was made available to Croarian business ownders for new liquidity loans, which are granted at interest rates reduced by 0.75 percentage points compared to regular loans, thanks to HBOR’s sources. The lowest loan amount that can be requested is not limited, and the highest is 35 million kuna.
300 million kuna has already been approved for businesses operating in the tourism industry
Until June the 5th, 2020, small and medium-sized enterprises from the Croatian tourism industry could apply directly to HBOR for a working capital loan at an interest rate of as little as 0%. To date, more than 550 applications have been received, half of which have already been processed, and loans totaling almost 300 million kuna have already been approved.
Working capital for rural development with an interest rate of 0.5%
Loans under the Working Capital for Rural Development programme in the amount of 190,000 kuna to 1.52 million kuna are approved by HBOR directly, without any accompanying fees, with an interest rate of 0.5% and with promissory notes as the only collateral.
HBOR assumes 50% of the risk for liquidity loans granted to exporters and indirect exporters
In addition to favourable loan funds, HBOR also introduced the Export Liquidity Loan Portfolio Programme. HBOR provides 50% of the amount of principal and interest on approved loans that banks include in their portfolio and as such, this enables the faster and easier approval of new funds to preserve the liquidity of exporters and indirect exporters.
An extended moratorium for all clients
HBOR has directly enabled all clients to whom a loan has been approved to use the moratorium for up to a total of 7 months (until the 30th of September, 2020), or for up to 10 months for those who have a positive COVID score (until the 31st of December, 2020). Clients engaged in tourism are allowed to use the moratorium for up to 16 months, more precisely until June the 30th, 2021, according to their statement.
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