FAQ Working Capital
1. Who can be the borrowers under the Working Capital loan programme?
The borrowers under the Working Capital loan programme can be private sector business entities: companies, crafts businesses, sole traders, family farms, cooperatives and institutions, and public sector business entities: companies and other entities (agencies, institutions etc.) owned or majority-owned by the units of local or regional government and/or the Republic of Croatia. The borrowers can also be private and public sector business entities that invest in the area of Sisak-Moslavina County and in the economic development of Lika-Senj County. For more detailed information, please visit the Loan Programme website.
2. What is the purpose of loans?
Loans are intended for the 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), the settlement of short-term obligations towards financial institutions, the state and the settlement of other short-term obligations, excluding the repayment of debt to the owner, connected clients and other third persons, with the maximum repayment period of up to 12 months, as well as the financing of defence activities.
3. What is the manner of finance?
There are several manners of finance:
4. What are the minimum and maximum individual loan amounts?
The minimum amount of an individual loan on-lent in cooperation with commercial banks is generally EUR 50,000. The minimum amount of an individual HBOR direct loan is generally EUR 500,000, whereas the minimum amount of loans intended for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County and for the economic development of Lika-Senj County is EUR 100,000. The maximum loan amount depends on the specific features and creditworthiness of the borrower, the purpose and structure of transaction as well as the availability of HBOR’s sources of finance. For more detailed information, please visit the Loan Programme website.
5. What are the loan disbursement period and the loan disbursement manner?
For short-term loans, the disbursement period is up to 3 months, one-off or successively, based on the documentation evidencing the utilisation of loan for earmarked purposes.
For revolving loans, the disbursement period is up to 12 months, on revolving principle, based on the documentation evidencing the utilisation of loan for earmarked purposes.
For long-term loans, the disbursement period is up to 12 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/contractors and/or to the borrower’s account, depending on the purpose of the working capital.
6. What is the loan repayment period?
For short-term loans, the repayment period is up to 12 months from the expiry of the disbursement period, provided that the total loan period (disbursement period and repayment period) shall not exceed the total of 12 months.
For revolving loans, the repayment period is up to 12 months from the conclusion of the Loan Contract. In the case of the revolving of the loan, which depends on the assessment of creditworthiness of the borrower and the availability of HBOR’s sources of finance, HBOR retains the right to change the interest rate and the fees on the revolved loan.
For long-term loans, the repayment period is up to 6 years, including a grace period of up to 2 years, depending on the purpose and creditworthiness of the borrower (for loans with a repayment period of 5 years and less than 5 years, it is possible to approve the maximum grace period of up to 1 year).
7. What is the loan repayment manner?
For short-term loans, the repayment is one-off or, generally, in equal monthly or three-monthly instalments; for revolving loans, the repayment is successive or one-off, not later than on the date of the contracted ultimate repayment deadline; for long-term loans, the repayment is generally in equal monthly, three-monthly or semi-annual instalments.
8. What are the obligatory collateral instruments?
In 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, loan insurance policies, guarantees of HAMAG-BICRO and other security instruments customary in banking operations) and with the risk assessment of the transaction and the borrower.
In loans on-lent in cooperation with commercial banks, the collateral is determined by the commercial bank. In loans under the risk-sharing model, the collateral is determined by the commercial bank and HBOR.
9. Can a start-up entrepreneur submit an application under the Working Capital loan programme?
Yes, it can. The Working Capital loan programme is implemented through commercial banks with which HBOR has agreed cooperation under the programme, and the list of commercial banks can be found on HBOR's website along with the programme itself. Eligible borrowers are determined by commercial banks on an individual basis.
The borrowers under the Working Capital loan programme can be private sector business entities: companies, crafts businesses, sole traders, family farms, cooperatives and institutions, and public sector business entities: companies and other entities (agencies, institutions etc.) owned or majority-owned by the units of local or regional government and/or the Republic of Croatia. The borrowers can also be private and public sector business entities that invest in the area of Sisak-Moslavina County and in the economic development of Lika-Senj County. For more detailed information, please visit the Loan Programme website.
2. What is the purpose of loans?
Loans are intended for the 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), the settlement of short-term obligations towards financial institutions, the state and the settlement of other short-term obligations, excluding the repayment of debt to the owner, connected clients and other third persons, with the maximum repayment period of up to 12 months, as well as the financing of defence activities.
3. What is the manner of finance?
There are several manners of finance:
- 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. In the case of lending through the risk-sharing model, the commercial bank as the applicant cannot use the loan funds to reduce its exposure towards the borrower.
- As an exception, direct lending is possible in the following cases (except for family farms that are not in the VAT system and associations): for loans in the amount of EUR 500,000 and above and for loans intended for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County in the amount of EUR 100,000 and above. In the case of direct lending, the borrower submits the application and the accompanying documentation to HBOR.
4. What are the minimum and maximum individual loan amounts?
The minimum amount of an individual loan on-lent in cooperation with commercial banks is generally EUR 50,000. The minimum amount of an individual HBOR direct loan is generally EUR 500,000, whereas the minimum amount of loans intended for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County and for the economic development of Lika-Senj County is EUR 100,000. The maximum loan amount depends on the specific features and creditworthiness of the borrower, the purpose and structure of transaction as well as the availability of HBOR’s sources of finance. For more detailed information, please visit the Loan Programme website.
5. What are the loan disbursement period and the loan disbursement manner?
For short-term loans, the disbursement period is up to 3 months, one-off or successively, based on the documentation evidencing the utilisation of loan for earmarked purposes.
For revolving loans, the disbursement period is up to 12 months, on revolving principle, based on the documentation evidencing the utilisation of loan for earmarked purposes.
For long-term loans, the disbursement period is up to 12 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/contractors and/or to the borrower’s account, depending on the purpose of the working capital.
6. What is the loan repayment period?
For short-term loans, the repayment period is up to 12 months from the expiry of the disbursement period, provided that the total loan period (disbursement period and repayment period) shall not exceed the total of 12 months.
For revolving loans, the repayment period is up to 12 months from the conclusion of the Loan Contract. In the case of the revolving of the loan, which depends on the assessment of creditworthiness of the borrower and the availability of HBOR’s sources of finance, HBOR retains the right to change the interest rate and the fees on the revolved loan.
For long-term loans, the repayment period is up to 6 years, including a grace period of up to 2 years, depending on the purpose and creditworthiness of the borrower (for loans with a repayment period of 5 years and less than 5 years, it is possible to approve the maximum grace period of up to 1 year).
7. What is the loan repayment manner?
For short-term loans, the repayment is one-off or, generally, in equal monthly or three-monthly instalments; for revolving loans, the repayment is successive or one-off, not later than on the date of the contracted ultimate repayment deadline; for long-term loans, the repayment is generally in equal monthly, three-monthly or semi-annual instalments.
8. What are the obligatory collateral instruments?
In 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, loan insurance policies, guarantees of HAMAG-BICRO and other security instruments customary in banking operations) and with the risk assessment of the transaction and the borrower.
In loans on-lent in cooperation with commercial banks, the collateral is determined by the commercial bank. In loans under the risk-sharing model, the collateral is determined by the commercial bank and HBOR.
9. Can a start-up entrepreneur submit an application under the Working Capital loan programme?
Yes, it can. The Working Capital loan programme is implemented through commercial banks with which HBOR has agreed cooperation under the programme, and the list of commercial banks can be found on HBOR's website along with the programme itself. Eligible borrowers are determined by commercial banks on an individual basis.