Working Capital COVID-19 Measure

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

• Borrowers have to prove the consequences of the COVID-19 (coronavirus) pandemic, i.e. they have to obtain a COVID score that is calculated by FINA, where loans cannot be granted to those business entities whose:

–  COVID score 1 is negative (-100), and/or

–  Risk classification based on the data received by FINA from the Croatian National Bank is 3 – not fulfilling obligations duly.

• Loans cannot be granted to clients against which bankruptcy or pre-bankruptcy settlement proceedings have been initiated.

• Financing of current business operations (e.g. purchase of raw materials, production materials, semi-products, small inventory, settlement of obligations towards suppliers, labour costs, general current operating expenses),
• Settlement of short-term obligations towards the state and settlement of other short-term obligations, excluding the repayment of debt* to the owner, related entities and other third persons as well as excluding the settlement of loan obligations towards commercial banks and other financial institutions.

*as an exception, the limitation provision regarding the repayment of loans does not relate to the loans granted in line with the purposes determined under the programme after the emergence of COVID-19 virus

• In cooperation with commercial banks under the risk-sharing model – application and related documentation shall be submitted to the commercial bank by the borrower.
• As an exception, direct lending is possible for loans in the amount exceeding HRK 37 million (except family farms that are not within the VAT system and associations) – application and related documentation shall be submitted to HBOR by the borrower.

Generally, the minimum loan amount is HRK 1,000,000.00*.

Maximum individual loan amount shall not exceed:

a) Twice the amount of annual salary expenditures of final beneficiary (including social security contributions and expenditures relating to the employees at the company location but formally on the payroll of subcontractor) for 2019 or for the last year available. As for final beneficiaries incorporated on 1 January 2019 or after that date, maximum loan amount shall not exceed the assessed annual salary expenditures for the first two years of operations; or

b) 25% of total income/revenues in 2019; or

c) With an appropriate explanation and based on a statement of final beneficiary on its liquidity needs, the amount of loan can be increased to cover the liquidity needs during the period of 18 months from the moment of approval in case of SMEs and during the period of 12 months from the moment of approval in case of large enterprises

*The amount relates to HBOR’s share under the risk-sharing model.

Depending on HBOR’s capacities:

• HRK indexed to EUR
• HRK

For loans under the risk-sharing model:

• HBOR’s interest rate is equal to the commercial bank’s interest rate, but cannot be lower than 2% per annum
• Depending on state aid regulations, it is possible to reduce the interest rate in the first three years of loan repayment to 0.00 percent per annum.

HBOR reserves the right to determine the level of interest rate different from the one specified in the programme for each individual loan amounting to HRK 37 million or more (i.e. equivalent value in another currency).

For direct loans above HRK 37 million:

• Interest rate is generally 2% p.a., and HBOR reserves the right to determine the level of interest rate different from the one specified, depending on the cost of available sources of funding and the regulations on the award of state aid and/or de minimis aid,
• When a loan is approved under the terms of the Temporary Framework for State aid measures of the European Commission, interest rates in the first 3 years of loan repayment are:

• Loan application fee: not charged
• Commitment fee: not charged
• Other fees are calculated and charged in accordance with the Ordinance on HBOR Services

• Up to 6 months
• One-off or successively, based on the documentation evidencing the utilisation of loan for earmarked purposes

Loan funds are disbursed to the accounts of suppliers on the basis of documentation for the utilisation of loan for prescribed purposes or to the borrower’s account, with obligatory justification through documentation for the utilisation of loan for prescribed purposes within 60 days from the disbursement of funds to the account.

Reimbursement of the borrower’s own funds used for purposes referred to in item 2. is allowed only for the amounts paid after 1 March 2020.

• Up to 5 years including a grace period of up to 1 year

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

• Collateral is determined by the commercial bank and HBOR

General Eligibility Criteria

List of Documentation and Commercial Banks

Decision on General Terms and Conditions of Lending Activities