HBOR Loans: Favourable Investment Lending From Recovery Funds

Lauren Simmonds

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As Poslovni Dnevnik writes, as part of the National Recovery and Resilience Plan (NPOO), HBOR has started implementing financial instruments that enable extremely favourable lending terms for investments of both private and public sector entities – with interest rates of 0.4 percent or interest rate subsidies of up to 75 percent.

Direct loans with an interest rate of as little as 0.4 percent

Direct loans from NPOO funds will be available to start-up companies (who have been in business for up to 3 years in total), young companies (up to 40 years), companies owned and/or managed by women, enterprises investing in special areas of the Republic of Croatia (assisted areas according to the development index, mountainous areas and islands) and enterprises investing in the commercialisation of research, development and innovation-based projects (RDI projects).

The interest rate for favourable HBOR loans to projects that are mostly focused on green or digital transition and the commercialisation of RDI projects will be a mere 0.4 percent per year, while the interest rate for other investments in competitiveness and resilience will be 0.8 percent per year. Loans will be approved without a fee for processing the request and without a fee for reserving the funds, with a a repayment period of up to 15 years, which includes the possibility of using a grace period of up to 3 years.

Up to 75 percent lower interest rate on existing HBOR programmes

HBOR loans will enable a significant reduction in interest rates for businesses of all sizes in both the Croatian private and public sectors within its existing investment financing programmes: Private Sector Investments, Public Sector Investments and Youth Entrepreneurship, Women and Beginners.

For investments in green or digital transition projects, the interest rate for the borrower can be reduced by up to 75 percent; for investments in special areas of the Republic of Croatia, including public sector investments in earthquake recovery, and investments in RDI projects up to 65 percent, and for other investments that increase competitiveness and resilience – up to 50 percent.

For example, the interest rate for a user of a direct HBOR loan who invests in the green transition project of his manufacturing company under the Private Sector Investment Programme would be 0.375 percent, instead of the current 1.5 percent. This interest rate can be further reduced depending on the area of ​​investment (thanks to subsidies from individual LRUs) and if the company employs a person under 30 years of age.

When HBOR loans are approved by a commercial bank or leasing company, the interest rate it sets for each project is reduced in the same way, thus providing enterprises with a significant reduction in interest rates. Loans from commercial banks and placements of leasing companies with a subsidy from NPOO funds will be available after concluding an appropriate agreement between HBOR and commercial banks, ie leasing companies, and until then, interested parties can apply for loans directly to HBOR.

The total value of these financial instruments, the implementation of which HBOR started, amounts to a massive 1.1 billion kuna. The goal of the financial instruments that HBOR will implement is to encourage the strengthening of investment activity, but also to enable a successful transition to green and digital technologies as the basis for the future sustainability and competitiveness of the Croatian economy as a whole.

Any project that uses NPOO funds through HBOR loans must meet the principles of non-significant damage to environmental objectives (Do No Significant Harm) in terms of excluding ineligible activities, sustainability testing and comply with relevant EU legislation. More details as well as the questionnaire that must be filled out when applying for a loan can be found on HBOR’s website.

For more, check out our business section.


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