Working Capital COVID-19 Measure for Entrepreneurs in Wood Processing and Furniture Production Industry

COVID-19 Measure for Entrepreneurs in Wood Processing and Furniture Production Industry is implemented as a temporary measure under the loan programme Working Capital, until the funds provided by the Ministry of Agriculture have been completely exhausted, but not later than 31 December 2021 (the loan contract should be concluded by that date at the latest). Applicants are not automatically entitled to obtain a loan. HBOR makes a decision on each individual application.

Borrowers

Small, medium-sized and large enterprises in accordance with the Commission Regulation (EU) No. 651/2014 ?f 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty that fulfil the following conditions and activities (Registered activity according to National Classification of Activities 2007 – NKD 2007 (Official Gazette No. 58/07): Activities:

Manufacture of wood and of products of wood and cork, except furniture; manufacture of articles of straw and plaiting materials (C16),
Manufacture of furniture (C31).

Terms and Conditions:

Generated at least 20% of income in foreign or international markets according to the data in the latest official annual financial statements of the company;

Borrowers should register on the digital platform of the Financial agency for monitoring the implementation of measures to help the economy due to the coronavirus pandemic (FINA portal MEASURES);
Clients that, according to the Methodology for the calculation of COVID score of the Financial Agency (FINA) are assessed as clients whose business is endangered and there is a need for additional financing, and all COVID score values are acceptable for financing, except negative value

Loans can be granted to entrepreneurs that are not in difficulties* i.e. that have fallen into temporary difficulties only because of the crisis caused by the COVID-19 outbreak. *Loans can not be granted to entrepreneurs that were in difficulties on 31 December 2019 (in accordance with the provisions of Article 2 point 18 of the Commission Regulation (EU) No. 651/2014 of 17 June 2014 declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 of the Treaty (OJ L 187 of 26 June 2014).

Purpose of Loans

Financing of salaries, overheads and other basic operating expenses (the so-called ‘idle mode’); preparation of production, purchase of raw materials, production materials, semi-products, small inventory and settlement of obligations towards suppliers and other current operating expenses; except for loan obligations towards commercial banks and other financial institutions and VAT.

Manner of Implementation

Lending in cooperation with commercial banks under the risk-sharing model – Application and related documentation shall be submitted by the borrower to the commercial bank.

Amount of Loans

The minimum loan amount is EUR 400,000.00 in HRK equivalent amount.
The maximum loan amount is pursuant to the criteria of HBOR’s State Aid Award Programme complied with the Temporary Framework for State Aid Measures to Support the Economy During the COVID-19 Outbreak and is limited to:

- 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

- 25% of total income/revenues in 2019; or

- With an appropriate explanation and based on a statement of final beneficiary on its liquidity needs, the amount of the loan can be increased to cover the liquidity needs during the period of 12 months from the moment of approval.

Loan Currency

HRK indexed to EUR
HRK

Interest Rate

For HBOR’s portion of the loan in the risk-sharing model, taking into account the subsidy of the Ministry of Agriculture of up to 2.00% per annum for the entire loan period, interest rate may be 0% per annum:

- Interest rate for final beneficiary is determined depending on possibilities of granting state aid according to the criteria of HBOR’s State Aid Award Programme complied with the Temporary Framework for State Aid Measures to Support the Economy During the COVID-19 Outbreak, according to which the minimum average weighted interest rate of HBOR and commercial bank must be:

- for SMEs:
  - 0.51% in the 1^st year of repayment
  - 0.76% in the 2^nd year and 3^rd year of repayment
  - 1.26% in the 4^th year and 5^th year of repayment
- for large entrepreneurs:
  - 0.76% in the 1^st year of repayment
  - 1.26% in the 2^nd year and 3^rd year of repayment
  - 2.26% in the 4^th year and 5^th year of repayment

Fees

For HBOR’s loan portion in the risk-sharing model:

no application fee
no commitment fee

Other fees are calculated and charged in accordance with the Ordinance on HBOR Services in effect on the day of calculation.

Period and Manner of Loan Disbursement

Up to 12 months, one-off or successively, based on the documentation evidencing the earmarked utilisation

Loan funds are disbursed to the accounts of suppliers on the basis of documentation for the utilisation of loan for prescribed purpose 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.

Repayment Period

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

Manner of Repayment

In equal three-monthly or six-monthly instalments

Collateral

Loan insurance policy issued by HBOR as insurer for and on behalf of the Republic of Croatia pursuant to HBOR’s terms and conditions of insurance (Ministry of Finance co-finances the insurance premium up to the amount of available de minimis aid)
Other customary collaterals in banking operations