FAQ Sustainable Tourism Loans
1. Who can a beneficiary of Sustainable Tourism Loans?
Beneficiaries of Sustainable Tourism Loans can be private sector business entities (companies, crafts businesses and institutions in private or majority-private ownership), which at the moment of submitting a loan application meet the following criteria:
- micro, small and medium-sized enterprises in accordance with the definition from the Recommendation of the European Commission 2003/361/EC of 6.5.2003;
- registered in accordance with the National Classification of Activities 2007 - NKD 2007 (Narodne Novine, Official Gazette of the Republic of Croatia Nos. 58/07, 72/07) for performing any of the following activities:
- Hotels and similar accommodation (NKD 55.1)
- Camping sites and camping grounds (NKD 55.3)
- Not later than at the moment of entering into loan contract, have a registered business unit or branch in the Republic of Croatia
The purpose of sustainable tourism loans are investments in fixed assets (tangible and intangible assets) and working capital of up to 30% of the contracted loan amount.
3. What is considered to be an eligible investment under the Sustainable Tourism Loans programme?
Eligible are investments in construction, reconstruction and/or renovation of, and equipment for hospitality establishments for accommodation and/or additional facilities of hospitality establishments for accommodation, resulting either in the increase in accommodation capacity or introduction of additional, optional facilities, or classification into type and/or category. Eligible investments are defined in Schedule 1 to the Loan Programme - Investment Eligibility Criteria. More information can be found on programme web page.
4. Can the application for Sustainable Tourism Loans be submitted through a commercial bank or directly to HBOR?
Loan application and related documentation shall be submitted to HBOR by the borrower via link.
5. What is the minimum amount and the maximum amount of the Loan for sustainable tourism?
The minimum loan amount is EUR 250,000, and the maximum loan amount is EUR 7,000,000.
Generally, HBOR can finance up to 85% of the estimated investment value, in accordance with the state aid rules. If the Borrower is granted regional aid, the Borrower must provide a financial contribution of at least 25% of eligible costs from its own or other sources, in a form free of any state aid, in accordance with the state aid rules, i.e. up to 75% of the estimated investment value can be financed.
6. What is capital discount and how can a right to a capital discount be exercised?
Capital discount relates to a write-off of a part of loan principal and can be realised for a loan amount higher than EUR 500,000. Capital discount is approved in accordance with the aid rules, and it is an aid in the form of a grant. The right to a capital discount is realised upon the fulfilment of the given criteria and it can amount to a maximum of 50% of the total disbursed loan principal amount, provided that the part of loan principal from the ERDF funds is written off in the amount of calculated capital discount. The criteria for the capital discount and the percentage of write-off of a loan principal that can be realised on the basis of each fulfilled criterion are defined in Schedule 2 to the Loan Programme: Criteria for Capital Discount. More information can be found on the programme web page.
7. What is the interest rate for Sustainable Tourism Loans?
Interest rate on the part of loan principal from the ERDF funds is 0.00% p.a., fixed, while on the part of loan principal from HBOR funds fixed interest rate is applied that is determined separately for each individual loan on the basis of risk assessment.
8. What is the amount of the loan application processing fee?
Neither loan application processing fee nor commitment fee is charged. Other fees are charged on the loan part from HBOR funds in accordance with the Ordinance on Fees for HBOR Services valid on the day of calculation, while on the part of loan financed from the ERDF funds other fees are not charged.
9. What are the loan disbursement period and the loan disbursement manner of Sustainable Tourism Loans?
The disbursement period is generally up to 12 months, and depending on the purpose and 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 the seller / supplier / contractor based on the documentation evidencing loan utilisation for earmarked purposes, while part of the loan intended for financing working capital can be disbursed to the account of the Borrower with obligatory justification evidencing loan utilisation for earmarked purposes.
10. Is the refund of costs allowed for costs incurred before loan application submission?
Refund is allowed only for eligible expenses incurred after the date of making of investment announcement or, if the announcement was not made, after the submission of loan application and which were paid after the making of loan approval decision.
11. What is the repayment period for Sustainable Tourism Loans?
Depending on the purpose and structure of investment, the loan repayment period is up to 17 years, up to 4-year grace period included.
12. What is the manner of repayment of Sustainable Tourism Loans?
Generally, the loan repayment is in equal monthly, three-monthly or semi-annual instalments.
13. How is the collateral determined?
Collaterals are determined in accordance with HBOR’s internal documents (e.g. bills of exchange, debentures, blank debentures, pledge of property with insurance policy endorsed in favour of HBOR, business shares insurance, bank guarantees and other security interests customary in banking operations), and the risk assessment of the investment and the borrower.
14. Can the loan application be submitted by a company that builds a guesthouse?
The abovementioned is not acceptable. Eligible investments are defined in Schedule 1 to the Loan Programme - Investment Eligibility Criteria. You can find more details on Sustainable Tourism Loans link.
15. Is tax debt settlement an eligible expense?
Tax debt settlement is not eligible for financing under the Sustainable Tourism Loan programme.
16. Can sustainable tourism loans be approved to start-ups?
Start-ups are an eligible category of beneficiaries of these loans.
17. Are investments in Integral hotels acceptable?
Investment in the construction of Integral hotels is not acceptable.
18. Are investments related to the construction of a completely new facility eligible?
The construction of a completely new facility is an eligible investment, except for investments in category ITR 1 (Index of tourism development of Local Government Units in the Republic of Croatia (ITR), where the investment project in hospitality facilities for accommodation must not lead to an increase in accommodation capacity compared to the accommodation capacity in the existing hospitality facility that is part of the project.