Youth, Female and Start-Up Entrepreneurship

1. Borrowers

Private sector business entities - companies, crafts businesses, sole traders, family farms, cooperatives and institutions that are young entrepreneurs, start-ups or female entrepreneurs* For the purpose of recovery from the consequences of earthquake and for stimulating the economic development of Sisak-Moslavina County - private sector business entities that operate or will operate in Sisak-Moslavina County**

*Criteria for defining youth, female and start-up entrepreneurship are available in the General Eligibility Criteria, which are a constituent part of this loan programme.
**HBOR may also consider loan applications for recovery from the consequences of earthquake of private sector business entities that operate in Zagreb and Karlovac counties.

2. Purpose of Loans

Investments in fixed assets (tangible and intangible assets) for the purpose of business start-up, business modernisation, introduction of new technologies, increase in capacities, including tourism capacities, development and introduction of new products and services, promotion of new employment, etc.
Working capital: up to 30% of the contracted loan amount.

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 (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

Minimum possible individual loan amount:

HBOR’s direct loans: generally, loans in the amount lower than EUR 100,000 are not approved;
Loans on-lent via commercial banks: generally, loans in the amount lower than EUR 50,000 are not approved;
Loans approved under the risk sharing model with commercial banks: HBOR’s share in a loan can generally not be lower than EUR 100,000;
Loans for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County: minimum loan amount is EUR 30,000
Loans for the economic development of Sisak-Moslavina County: minimum loan amount is EUR 50,000;

Maximum loan amount: EUR 300,000 depending on the specific features and creditworthiness of the borrower as well as the purpose and structure of investment; it is possible to finance up to 85% of the estimated investment value, VAT not included*;

Depending on the specific features and creditworthiness of the borrower as well as the purpose and structure of investment, for loans of up to EUR 100,000 it is possible to finance 100% of the estimated investment value, VAT not included;

For loans withhe purpose of recovery from the consequences of earthquake and for stimulating the economic development of Sisak-Moslavina County maximum loan amount can be up to 100% of estimated investment value, VAT included (except for loans with interest subsidy under the NRRP funds), provided that financing of VAT for the borrowers that operate within the VAT system is possible (except for loans with interest subsidy under the NRRP** funds) only through the award of de minimis aid. In such a case, VAT has to be allocated to working capital in the breakdown of investment contained in the loan application.

*HBOR can consider financing of the estimated investment value, VAT included, if the borrower delivers goods or provides services that are excluded from the VAT calculation or for the borrowers not operating within the VAT system.
**NRRP - National Recovery and Resilience Plan

5. Loan Currency

EUR

6. Interest Rate

Interest rate	Possibilities of reduction	Criteria
4% p.a., fixed	- 0.2 percentage points	for youth employment
up to - 2 percentage points	with subsidy granted by County/City/Municipality
2% p.a., fixed for business entities investing in recovery from the consequences of earthquake and stimulating the economic development of Sisak-Moslavina County	- 0.2 percentage points	for youth employment

Interest rate

Possibilities of reduction

Criteria

4% p.a., fixed

- 0.2 percentage points

for youth employment

up to - 2 percentage points

with subsidy granted by County/City/Municipality

2% p.a., fixed

for business entities investing in recovery from the consequences of earthquake and stimulating the economic development of Sisak-Moslavina County

- 0.2 percentage points

for youth employment

In certain cases, interest rate can be even higher as follows:
- for borrowers that perform business activity and cannot obtain state aid and/or de minims aid, effective interest rate (EIR)* cannot be lower than the reference interest rate for a single borrower (RIR), all in accordance with the regulations on the award of state aid
- 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. Interest rate for loans with subsidy under the NRRP* funds

For borrowers and loans that meet the conditions prescribed by the Operational Programmes for the Implementation of Financial Instruments under the NRRP*, and part of the regular interest rate is subsidised by HBOR, in its own name and for the account of the Republic of Croatia, as follows:

For investments in green and/or digital transition: up to 75% of the regular interest rate, and a maximum of 3.00 p.p.
For investments in special areas of the Republic of Croatia and/or RDI (research, development and innovation): up to 65% of the regular interest rate, and a maximum of 3.00 p.p.
For other investments in competitiveness and resilience: up to 50% of the regular interest rate, and a maximum of 3.00 p.p.

The regular interest rate is determined in the following manner:

In case of lending in cooperation with commercial banks, interest rate is determined by the commercial bank in accordance with its internal documents
In case of direct lending:
- On loans in the amount lower than EUR 400,000:
  - 4.00% p.a., fixed
  - Business entities investing in the recovery from the consequences of earthquake and in the economic development of Sisak-Moslavina County: 2.00% p.a., fixed
  - At the level of reference interest rate (RIR)** for an individual borrower if it is higher than the interest rates referred to in the above indents
- On loans in the amount of EUR 400,000 or above: HBOR determines the interest rate for each individual loan

The highest possible amount of subsidised interest for a single loan is:

EUR 500,000.00 for micro, small and medium-sized enterprises
EUR 1,000,000.00 for mid-caps and large entities

*NRRP - National Recovery and Resilience Plan
**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.

8. 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 loan amount
- Commitment fee: 0.25% on the contracted undisbursed loan amount
For loans aimed at recovery from the consequences of earthquake and stimulating the economic development of Sisak-Moslavina County:
- No loan application fee charged
- No commitment fee charged
- No fee charged for changing loan terms and conditions

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

9. Period and Manner of Loan Disbursement

Generally, disbursement period is up to 12 months, and depending on the purpose and the dynamics of investment, it is also possible to approve a longer period of loan disbursement
Part of the loan intended for the financing of fixed assets is disbursed to the account of seller/supplier/contractor based on the documentation for utilisation of loan for earmarked purposes
Part of the loan intended for the financing of working capital can be disbursed to the account of the borrower, with obligatory justification by documentation evidencing the use of loan for earmarked purposes
For loans aimed at recovery from the consequences of earthquake and stimulating the economic development of Sisak-Moslavina County: refund of borrower’s investment that took place after the earthquake until the submission of loan application is permitted (for such a refund, commercial banks are not obliged to submit a prior notice to HBOR)

10. Repayment Period

Up to 12 years, with up to 3-year grace period included, depending on the purpose and structure of investment

As an exception to the mentioned, depending on the purpose and structure of investment, it is possible to approve the following repayment and grace periods:

For the planting and/or restructuring of perennial crops in agriculture: up to 14 years, including grace period of up to 5 years
For investments in tourism or if the investment study indicates the need for longer maturity and/or grace period: up to 14 years, including grace period of up to 4 years

11. Manner of Repaymentepayment

Generally, in equal monthly, three-monthly or semi-annual instalments

12. 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 (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, guarantees of HAMAG-BICRO and other security instruments customary in banking operations), and the risk assessment of the investment and the borrower.

13. Related Documentation / Schedules

14. Others

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The views and opinions expressed are solely those of the author and do not necessarily reflect the official views of the European Union or the European Commission. Neither the European Union nor the European Commission can be held responsible for them.