HBOR FAQ - Lending


1. Does a business entity have to be 100% owned by women or is it enough to have only a control stake of 51% in order to be eligible for a loan according to the criterion of female entrepreneurship?
Female entrepreneurs are business entities in which at least one or more women together have more than 50% of ownership and which are also managed by a woman. In the case of a company that is neither micro nor small company, a woman or women together can have less than 50% of ownership, provided that at least one woman is in one of the key management positions related to finance and/or operational affairs and/or strategy.

2. Who are start-up entrepreneurs?
Entrepreneurs that establish a business entity for the first time or business entities that have been operating less than three years at the time of applying for a loan. Start-up entrepreneurs were not previously owners and are not currently owners or co-owners of another business entity with a share of more than 30%.

3. Who are young entrepreneurs?
Business entities in which at least one or more young persons (in the age group up to 40 at the time of submitting a loan application) together have more than 50% of ownership.

4. Can a person who is now 40 years old enter the category of young entrepreneurs?
No. At the time of application submission, person must be under 40.

5. Is somebody who founded a company two months ago considered a start-up entrepreneur if he/she is the owner of another company that has not been operating for more than two years?
He/she can be considered a start-up entrepreneur.

6. What does working capital financing include?
Working capital are funds necessary for the financing of current (short-term) liabilities that arise in regular business activities of final borrower, and relate to raw materials and materials, supplies, other production costs, salaries, accounts receivable and general expenses.

7. Does a business entity have to have at least one employee to apply for a loan from HBOR?

8. Who are micro, small and medium entrepreneurs?
Private sector business entities that employ fewer than 250 persons and have an annual turnover that does not exceed EUR 50 million and/or an annual balance sheet total that does not exceed EUR 43 million according to the latest available annual financial statements, in accordance with the Commission Recommendation 2003/361/EC of 6 May 2003 concerning the definition of micro, small and medium-sized enterprises (OJ L 124, 20 May 2003)

9. Is it necessary to have own participation in the investment under the Youth, Female and Start-Up Entrepreneurship programme?
Depending on the specific features and creditworthiness of the borrower as well as the purpose and structure of investment, for loans in the amount of up to EUR 100,000 it is possible to finance up to 100% of the estimated value of investment, VAT not included, and above EUR 100,000 it is possible to finance up to 85% of the estimated value of investment, VAT not included.

10. Is it possible to consider financing  of the estimated value of investment, VAT included, if the borrower supplies goods or renders services that are exempt from VAT calculation or for borrowers that do not operate under the VAT system?
Yes, except for loans from the NRRP funds.

11. Can start-up entrepreneurs apply for a loan under the Private Sector Investment programme?

12. Who can obtain a reduced interest rate by 0.20 p.p. based on HBOR's „Youth Employment“ measure?
Micro entrepreneurs with up to 9 employees and small entrepreneurs with 10 to a maximum of 49 employees per year, full-time employees, that, during 6 months prior to submitting a loan application to HBOR or to commercial bank, employed or still employ or plan to employ in the next 6 months, counting from the day of loan contract signing, at least one young person (up to 30 years).

13. Can a student be hired in order to exercise the right to a reduction of interest rate under the „Youth Employment“ measure?
The measure includes indefinite-term employment, fixed-term employment, fixed-term employment for permanent seasonal jobs, internships and professional training without establishing an employment relationship. Hiring of workers through temporary employment agencies and work through school or student services is not included.

14. Can loan fees be paid from the loan?
It is possible to pay only the loan application processing fee from the loan if the loan purpose is financing of working capital.

15. Can a moveable property or real estate owned by another person (with his/her consent) and not the person applying for a loan serve as collateral?
Yes. The person who is the owner of real estate enters into a credit relationship as a pledgor.

16. Is business plan a mandatory part of the documentation submitted when applying for a loan?
For all investments / projects with an estimated value of up to EUR 400,000 it is necessary to submit a business plan, and above EUR 400,000 an investment study.

17. Does HBOR offer assistance in preparing a business plan / investment study?
HBOR does not participate in the preparation of a business plan / investment study, however, on the HBOR website, as part of the Documentation for submitting applications under each individual loan programme a Business plan template is published, and instructions on what  an investment study must include can be found at: Recommended content of the investment study.

18. Can a start-up entrepreneur apply for a loan under the Working Capital programme?
Yes. The Working Capital 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 the HBOR website alongside the programme. Commercial banks determine eligible borrowers on their own.

19. Is it acceptable to finance the purchase of real estate from a connected client?
The purchase of real estate or moveable property from connected clients is not eligible for financing via HBOR loan programmes.

20. Does HBOR finance housing construction?
Housing construction is not eligible for financing.

21. Is the purchase of land and machinery for the purpose of agricultural production an eligible investment?
Investment is eligible for financing, but only 10% of the value of investment in land can be financed at promotional interest rate, and the rest at reference interest rate.

22. Can a purchase of vehicle be financed from investment programmes for a company whose registered activity is road transport of goods?
Yes, but due to the State Aid Rules that apply to the activity of road transport of goods and if the investment relates to the purchase of a vehicle, there is a possibility that interest rate on the loan would be higher compared to the interest rate specified in the programme. For the purchase of a vehicle, the LEASING programme is recommended.

23. What is considered as justified costs under the planned project?
Only costs incurred after submitting a written loan application or an investment announcement can be recognised as justified costs under the planned project.

24. What is an investment announcement?
The investment announcement is a form available on HBOR website that is submitted by business entities which can be classified as entrepreneurs in terms of state aid regulations. The announcement is made before submitting of a loan application to HBOR for the purpose of recognising justified costs under the planned project that may arise before submitting of loan application. Justified costs under the planned project can be recognised from the moment when this announcement has been received in HBOR. This information is considered an application for aid, unless more than 6 (six) months have passed between the submission of the information and the submission of loan application. In this case, justified costs are recognised from the moment of loan application submission to HBOR, i.e. the loan application is considered to be an application for aid.

25. Can accommodation units be financed from the ESIF Growth and Expansion loan programme?
The investment is eligible for financing under the ESIF Growth and Expansion programme. Section I: Tourism (Accommodation activities - sub-section 55)

26. Can start-up entrepreneurs be the beneficiaries of ESIF Growth and Expansion loans?
Only if they can fulfill requirement that a business entity has to operate for at least two years in the Republic of Croatia before a loan application can be submitted.

27. Are the applications for ESIF Growth and Development loans submitted to HBOR?
No, the programme is implemented in cooperation with three commercial banks. Loan applications and other supporting documents are submitted to the banks: Erste & Steiermärkische bank d.d., Privredna banka Zagreb d.d., Zagrebačka banka d.d.

28. What types of bank guarantees are offered by HBOR?
Export bank guarantees and performance-related bank guarantees.

29. What is considered a performance-related bank guarantee?
Tender guarantee, performance guarantee, advance payment guarantee, warranty guarantee.

30. Can a natural person apply for a guarantee?
No. Applicant is an entrepreneur with headquarters in the Republic of Croatia or an entrepreneur with a business unit or branch in the Republic of Croatia that intends to compete, pursuant to the conditions prescribed by the beneficiary of bank guarantee, or that intends the conclude a contract for the purchase and sale of goods, works or services with the bank guarantee beneficiary, respectively.

31. To whom can an application for issuing HBOR's bank guarantee to farmers affected by the earthquake be submitted?
An application for issuing such bank guarantee is submitted in cooperation with, and through the Ministry of Agriculture. The Ministry will assist you with the preparation of documentation and submission of the Application for issuing an advance payment guarantee in HBOR.

32. Who are eligible borrowers under the EU Projects programme?
Private and public sector business entities that meet the conditions of tenders for grants financed from the budget of the European Union and / or national sources and other foreign public sources.

33. How is the loan repayment carried out?
In equal monthly, quarterly or semi-annual instalments.

34. Is the loan disbursed to the supplier's account or to the account of the borrower?
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 for earmarked use of funds, and part of the loan intended for financing working capital can be disbursed to the borrower's account, with obligatory justification by documentation evidencing the earmarked use of loan funds.

35. In which cases can the loan disbursement period be longer than 12 months?
When it is justified by the planned investment dynamics.

36. Can the documentation related to the submitting of loan application be sent via e-mail?
No, the complete documentation must be delivered in person or by post to our address.

37. Can I apply for a loan as a natural person, and register a company only when the loan is approved?
No, natural persons cannot apply for a loan, but only registered business entities.

38. Can I send only a few documents, and then supplement the rest of documentation?
When applying for a loan, it is necessary to submit the complete documentation.

39. What are the General Eligibility Criteria and do they apply to all loan programmes?
The General Eligibility Criteria define the general characteristics, restrictions and special features that apply to lending. They specify, inter alia, eligible borrowers and ineligible activities, businesses and purposes together with the corresponding exceptions, if any.

40. What collateral can HBOR accept?
In the case of direct lending, HBOR contracts collaterals with the borrower pursuant to HBOR's internal documents (e.g. bills of exchange, debentures, pledge of property with property insurance policy endorsed in favour of HBOR, pledge of business shares, bank guarantees, HAMAG-BICRO guarantees and other collaterals common in the banking business) and in accordance with the assessment of investment risks and borrowers. Collateral is determined after the processing of a loan application, i.e. entire prescribed documentation.
In the case of lending in cooperation with commercial banks, the collateral is determined by the commercial bank.

41. What does the following wording in a loan programme mean: up to 85% of investment preliminary value without VAT for loans exceeding EUR 100 thousand?
It means that HBOR’s loan can be used to finance up to 85% of investment preliminary value without VAT (calculated VAT is not financed from the loan but from the borrower’s own funds) and the remaining investment value is financed from the own funds of the investor/borrower.

42. Do I deliver to HBOR the information on the amount of the total planned investment?
Yes, the breakdown of investment, i.e. the total investment amount, is entered in the “Investment Table” template and it is stated which part is financed from the own funds and which part is planned to be financed from the loan funds.

43. Is it possible to refinance an existing loan by HBOR's loan?
HBOR’s loan programmes do not allow refinancing of existing loans unless it is explicitly stated as eligible in the programme itself.

44. How can I submit a loan application?
All documentation is submitted in one of the following ways:
  1. Direct lending
    1. By post or in person to the address: Hrvatska banka za obnovu i razvitak, Zelinska 3, 10000 Zagreb
    2. Electronically via the link: Submit application
  2. Lending through a commercial bank: in a way determined by the commercial bank
45. For what purposes are loans approved under the Working Capital loan programme?
The purpose that is eligible for financing under a loan programme, which means under the Working Capital loan programme as well, is stated in the wording of the very loan programme (paragraph 2: Purpose of Loans).

46. Is it possible to obtain an advance payment for the purchase of investment equipment or performance of construction works?
In the case of direct lending, advance payment for the purchase of investment equipment or performance of construction works is possible in the amount of up to 30% of the contracted value of individual equipment or 10% of construction works, which does not apply to the individual contracted value of equipment or works of up to EUR 15,000 for micro entrepreneurs, EUR 25,000 for small entrepreneurs, EUR 40,000 for medium-sized entrepreneurs and EUR 66,000 for large entrepreneurs. More information can be found in the General Terms and Conditions of Lending Activities of HBOR linked to the selected loan programme.

47. Do I have to complete the business plan template available on HBOR’s websites when applying for a loan of up to EUR 400,000?
Yes, it is mandatory to complete the business plan, i.e. the template published on our website.

48. Is there a minimum realised business income of an applicant in terms of applier’s eligibility?
HBOR does not have a prescribed criterion for the minimum realised business income, however, during the processing of the loan application, it will be analysed whether the applicant has the repayment potential for the requested amount and the repayment period of the loan.

49. Is the interest rate published in loan programmes connected with the aid?
Generally, the interest rates specified in the loan programmes contain aid. The total amount of aid that can be granted to one entrepreneur is determined by state aid rules. If a client has already used part or all of it, then he/she will not be able to use the interest rate from the desired loan programme and he/she will have to pay the reference interest rate (RIR). More information can be found in the General Eligibility Criteria.