Pre-Export Finance

1. Borrowers

Private sector business entities - companies, crafts businesses, sole traders, family farms, co-operatives and institutions
Public sector business entities - companies and other business entities (agencies, institutions, etc.) majority-owned by the units of local or regional government and/or the Republic of Croatia

2. Purpose of Loans

Pre-shipment export finance until collection (purchase of raw materials, production materials, semi-products, settlement of obligations towards suppliers, labour costs and other current expenses) and/or financing the collection of payment for an export transaction.

Not eligible for financing:

- Export of services, except for construction and transportation services, services directly related to the export of goods (assembly etc.), services of finishing or exports pursuant to intergovernmental agreements (employee dispatching);
- Pre- and post-shipment export finance of raw materials;
- Goods under export quotas or export embargo;
- Export of products manufactured in an environmentally unacceptable manner;
- Mediation in trade with foreign countries (re-export).

3. Manner of Implementation

In cooperation with commercial banks (via commercial banks or through risk-sharing model) - application and related documentation shall be submitted to the commercial bank by the borrower
Direct lending to borrowers is possible for loans exceeding EUR 200,000 (except family farms that are not within the VAT system and associations) - application and related documentation shall be submitted to HBOR by the borrower

4. Loan Amount

Generally, loans in the amount lower than EUR 50,000 are not approved, and the maximum loan amount depends on specific features and creditworthiness of the borrower, contracted export transactions, calculation of necessary funds, available HBOR’s sources of finance, etc.

5. Loan Currency

EUR

6. Interest Rate

Minimum 4.40% p.a. fixed

In accordance with the regulations on the award of state aid, effective interest rate (EIR)* cannot be lower than the reference interest rate for a single borrower (RIR)**
for borrowers with loans in the amount of EUR 5 million and above, HBOR determines the level of interest rate for each individual loan

*Effective interest rate (EIR) is an interest rate that shows total costs of a loan in accordance with the valid Decision on Effective Interest Rate of the Croatian National Bank **Reference interest rate (RIR) is the base rate (calculated and published by the European Commission), increased by a certain number of basis points (margin) that depend on the client’s rating (credit rating) and the assessment of collaterals, in accordance with the Communication from the Commission on the revision of the method of determining reference and discount rates (OJ C 14, 19.1.2008). It is applied for the calculation of aid in loans approved with promotional interest rates. The range of valid RIR is available in the Information on Base and Discount Rates and Reference Rates.

7. Fees

Variable, in accordance with the Ordinance on Fees for HBOR Services valid on the day of calculation:
- Loan application fee:
  - 0.50% on the contracted (revolved) loan amount, but not less than EUR 66.36
- Commitment fee:
  - For public sector entities: no fee
  - For other entities: 0.25% on the undisbursed loan amount

and other fees in accordance with the Ordinance on Fees for HBOR Services valid on the day of calculation.

8. Period and Manner of Loan Disbursement

Financing of an individual transaction:
- Generally, up to 3 months, exceptionally longer, depending on the duration of production/business process
- Loan can be disbursed one-off or successively based on the documentation for utilisation of loan for earmarked purposes
Framework revolving loan:
- Generally, up to 12 months
- The loan is disbursed on revolving principle based on the documentation for utilisation of loan for earmarked purposes, with the obligation of submitting three-monthly or six-monthly justification through documentation evidencing the utilisation of loan for earmarked purposes

Loan funds are disbursed to the account of the supplier/contractor and/or to the borrower’s account in the case of pre-shipment export finance and/or to the borrower’s account in the case of collection of payment for an export transaction.

9. Repayment Period

Financing of an individual transaction:
- Up to 15 working days from the day of collection of payment for the export transaction for which the loan has been contracted and generally not longer than 12 months from the end of the disbursement period, except if a production/business process and the contracted collection period do not exceed 12 months.
Framework revolving loan:
- Loan revolving is possible, depending on the assessment of creditworthiness of the borrower and available HBOR's sources of finance, where HBOR retains the right to change the interest rate and the fees of the revolved loan. If the loan does not revolve, it becomes due in entirety on the last day of the disbursement period.

10. Manner of Repayment

Financing of an individual transaction:
- One-off repayment
Framework revolving loan:
- One-off, not later than on the contracted repayment date, or earlier, if the borrower cannot justify a part of the loan through documentation evidencing the utilisation for earmarked purposes.

11. Collateral

Lending in cooperation with commercial banks: collateral is determined by the commercial bank
Risk sharing model: collateral is determined by the commercial bank and HBOR
Direct lending: HBOR agrees the collateral with the borrower in accordance with HBOR’s internal documents and the risk assessment of the transaction and the borrower (e.g. bills of exchange, debentures, pledge of property with insurance policy for the property endorsed in favour of HBOR, pledge of business shares, bank guarantees and other security instruments customary in banking operations)