Loan Programme for Financing Foreign Buyers / Buyers’ Banks
All terms and conditions under this Programme are in accordance with the Rules of the OECD Consensus.
1. Goal of the Loan Programme and Purpose of the Loans
The goal of the Programme is to enable the competitiveness of exporters in foreign markets (by providing longer repayment terms to foreign buyers), increase the liquidity of exporters and reduce the risks that exporters face when participating in international trade.
The purpose of this Programme is financing exports of goods and services, except consumer goods.
Eligible borrowers are:
- the commercial bank of a buyer, with whom an exporter has concluded an export contract or
- the buyer itself if covered by acceptable collateral.
3. Manner of Implementation of the Loan Programme and Loan Application Procedure
HBOR may finance the foreign buyer:
- by co-financing export transactions with other banks, or
- by financing the bank or the buyer abroad on its own.
A loan application is submitted by the exporter, who has obliged itself, in accordance with the requirements of a buyer or the terms and conditions of an international tender, to offer a direct loan to the buyer, the proceeds of which will be used for paying the amounts receivable under the export contract.
An application for a loan to a foreign buyer or its bank, the exporter submits directly to HBOR generally before the export contract has been concluded.
Committed loan funds under the Programme shall be disbursed directly to the exporter’s foreign currency account after all preconditions contained in the loan contract with the foreign buyer or buyer’s bank have been fulfilled. The loan shall be repaid by the foreign buyer or its commercial bank.
4. Loan Amount and Repayment
The loan may finance up to 100% of the export contract value for repayment periods up to two years, or up to 85% of the export contract value for repayment periods over two years.
In case of repayment periods over two years, the export contract must provide for an advance payment to be paid in principle prior to the first disbursement of the committed loan, and/or an interim payment (cash down payment) to be entirely effected before the last disbursement of the committed loan in the amount of at least 15% of the export contract value. This amount must be paid by the buyer to the exporter’s account, generally before the first disbursement of the committed loan funds. The amount of the cash payment for loans granted for the construction of ships must be at least 20% of the contracted price.
The export contract value is the total value of exported goods and services to be paid for by the buyer (excluding local costs and interest).
The amount of local costs financed from the proceeds of the loan granted by HBOR to the buyer/bank must not exceed 30% of the export contract value. Local costs include expenditure on goods and services in the buyer’s country necessary for honouring the export contract.
Loans are denominated in the export contract currency.
Repayment (by type of goods and services exported)
- Consumer goods with service life of 1 year or less, including related services – up to 6 months;
- Consumer goods with service life of more than 1 year, including related services – up to 2 years;
- Parts and components, including related services – up to 5 years;
- Quasi-capital goods (Capital goods of lower individual value) , including related services – up to 5 years;
- Capital goods, including related services – up to 10 years.
- For financing the construction of hydro and thermal power plants, projects based on wind energy, geothermal, solar and bio energy projects, tide power plants and water supply and sewerage projects – up to 15 years
- date on which the buyer takes physical possession of the goods in the importing country – sale of equipment consisting of individual segments that can be used separately;
- date on which the buyer takes over the entire plant under the export contract – construction of a whole plant (thermoelectric power plants, etc.), unless a commissioning, i.e. turn-key basis has been agreed;
- date on which works have been completed – construction works, if the contractor is not responsible for commissioning;
- date on which preliminary tests, and tests ensuring that the plant is operational, have been made after the completion of installation and construction works – in case of contractual responsibility of the supplier or the contractor for the good working order of the plant, for plan commissioning or operation, (applies whether or not the plant is taken over by the buyer according to the export contract, and irrespective of any continuing obligation which the supplier or the contractor may have undertaken (e.g. technical guarantee for the plant or local staff training for work at the plant));
- delivery date of each individual segment or average of several deliveries – in the cases from b) to d), if separate deliveries of individual project segments have been agreed in the contract.
Principal repayment: The principal can be repaid in equal monthly, quarterly, semi-annual or annual instalments (The repayment in annual instalments is possible only exceptionally, i.e. if the nature of the project justifies such manner of principal repayment.) , with the first instalment maturing 1, 3, 6 or 12 months after the loan repayment start date depending on the selected manner of principal repayment.
Loan may be prematurely repaid with a prior written notification sent to HBOR, provided a premature repayment fee is paid.
The interest rate depends on the creditworthiness of the buyer/bank, on the importing country and on the export transaction, and may be fixed or variable. The interest is calculated monthly, quarterly, semi-annually or annually (depending on the selected manner of principal repayment).
Interest during the disbursement period is not added to the principal, but repaid.
1) Fixed interest rate
At the time of the loan agreement conclusion, the interest rate cannot be lower than the internationally prescribed lowest interest rate – Commercial Interest Reference Rate – CIRR for the export contract currency. If the interest rate is determined before the loan agreement conclusion (by an indicative offer, letter of intent or similar document), it cannot be lower than CIRR increased by 0.2%. In this way, the interest rate can be determined for the period no longer than 120 days.
2) Variable interest rate
In principle, the variable interest rate is determined on the basis of applicable LIBOR or EURIBOR rate increased by margin, which depends on the creditworthiness of the buyer/bank, on the importing country and on the export transaction.
Loan application fee for final borrowers:
- a one-off loan application fee of up to 1% on the committed loan amount
- charged before the first disbursement date
- a commitment fee of up to 1% p.a. is charged by HBOR on the undisbursed loan amount, starting from the date of fulfilment of conditions preceding documents under the loan agreement until the end of the loan disbursement period
7. Loan Disbursement
The disbursement period depends on details of an export transaction or project and is determined on the basis of the Loan Contract pursuant to the terms and conditions of an export contract. Loan funds shall be disbursed directly to the exporter’s foreign currency account.
For the purpose of securing due fulfilment of loan obligations under the Loan Programme, HBOR in principle requires an insurance policy against political and commercial risks issued on behalf of the Republic of Croatia, and all other acceptable security.
The provisions of HBOR’s Regulations on Basic Terms and Conditions of Financing Individual Target Groups, HBOR’s Decision on General Terms and Conditions of Lending Activities, the General Terms and Conditions of Insurance of HBOR’s Placements, HBOR’s Decision on Interest Rates with the Interest Calculation Regulations, the Decision on Fees for HBOR Services with the Fee Calculation Regulations as well as provisions of other HBOR documents and decisions made by HBOR bodies in charge shall apply as appropriate within the framework of this Loan Programme.
10. Documentation to Support Loan Application
Borrower (foreign buyer or foreign buyer’s bank):
- Profit and Loss Account for the last two business years
- Balance Sheet for the last 2 business years
- Audited financial statements
- Annual report
- Certificate of entry into Court Register
- Data on ownership structure
- List of authorised signatories for representing business entity
- List of authorised signatories for signing payment orders and disposing of the funds deposited in the accounts.
- For buyer credit borrowers abroad: questionnaire for legal persons, information about the real owners of the party-applicant for the loan, Table 1 and 2 – Attachment to data on the actual owners of the party-applicant for the loan, the questionnaire for foreign politically exposed persons pursuant to the Act on the Prevention of Money Laundering and Terrorism Financing, Official Gazette of the Republic of Croatia no. 87/08. Forms in English are available on HBOR’s website www.hbor.hr/eng
- Excerpt from the Court Register (issued not more than 30 days beforehand)
- Company incorporation documents (Articles of Incorporation in the case of a limited liability company By-Laws in the case of a shareholding company)
- List of authorised signatories for disposing of the funds deposited in the account
- Notification of the classification of the business entity according to NKD (national classification of economic activities)
- BON 1 and BON 2/SOL 2 issued not more than 30 days beforehand
- Balance Sheet (for medium-sized and large entrepreneurs) B/POD-V form, and Profit and Loss Account (for medium-sized and large entrepreneurs) RDO/POD-V form; or Annual Financial Statements for large, medium-sized and small entrepreneurs – GFI-POD form (for the last two years)
- Notes to the financial statements
- Complete auditor’s report (in accordance with legal requirements)
- Questionnaire for legal persons, information about the real owners of the party-applicant for the loan, Table 1 and 2 – Attachment to data on the actual owners of the party-applicant for the loan, the questionnaire for foreign politically exposed persons pursuant to the Act on the Prevention of Money Laundering and Terrorism Financing, Official Gazette of the Republic of Croatia no. 87/08. Forms are available on HBOR’s website www.hbor.hr
HBOR reserves the right to request other documentation as necessary for the processing of a loan application.
More detailed information ralating to this programme can be obtained at:
HBOR, Strossmayerov trg 9, 10000 Zagreb
Phone: +385 1 / 45 91 666