Private Sector Investment

1. Borrowers

Private sector business entities - companies, crafts businesses, sole traders, family farms, cooperatives and institutions.

For the purpose of recovery from the consequences of earthquake and for stimulating the economic development of Sisak-Moslavina County - business entities of the private and public sectors that operate or will operate in Sisak-Moslavina County*.

*HBOR may also consider loan applications for recovery from the consequences of earthquake of business entities from the private and public sectors operating in Zagreb and Karlovac counties.

2. Purpose of Loans

Investments in fixed assets (tangible and intangible assets) for the purpose of business modernisation, introduction of new technologies, increase in capacities, investments in research and development and introduction of new products or services, promotion of environmental protection, energy efficiency and renewable energy resources projects, tourist capacities and facilities as well as promotion of new employment
Investments in fixed assets (tangible and intangible assets) for the purpose of recovery from the consequences of earthquake and for stimulating the economic development of Sisak-Moslavina County*
Working capital: up to 30% of the contracted loan amount

Within the framework of this programme, HBOR may consider approval of loans to exporters registered in the Republic of Croatia for the purpose of expanding and internationalising business in the area of its predominant activity with the following purposes:

Purchase of business shares in a foreign company, where the assessment of eligibility in direct lending is based primarily on exporter's creditworthiness**
Capital investment in a foreign company (purchase of machinery and equipment and/or refurbishment/reconstruction of business premises), where the exporter registered in the Republic of Croatia has a majority business share in the foreign company.**

*HBOR may also consider loan applications for recovery from the consequences of earthquake of business entities from the private and public sectors operating in Zagreb and Karlovac counties.
**The following is not eligible: purchase of a business share from a connected client in terms of ownership. Neither purchase of a business share nor a capital investment in a company with the headquarters in: - a country or region against which or against whose government the sanctions programmes implemented by relevant competent authorities are directed; - a country that is considered an offshore financial centre. This includes but is not limited to: - countries that finance or support terrorist activities or within which terrorist organisations operate; - countries that are on the EU’s list of non-cooperative jurisdictions for tax purposes.

3. Manner of Implementation

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

Direct lending to borrowers (except family farms that are not within the VAT system and associations) - application and related documentation shall be submitted to HBOR by the borrower

4. Loan Amount

Minimum possible individual loan amount:

HBOR’s direct loans: generally, loans in the amount lower than EUR 100,000 are not approved;
Loans on-lent via commercial banks: generally, loans in the amount lower than EUR 50,000 are not approved;
Loans approved under the risk sharing model with commercial banks: HBOR’s share in a loan can generally not be lower than EUR 100,000;
Loans for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County: minimum loan amount is EUR 30,000

The maximum loan amount is not limited and depends on the specific features and creditworthiness of the borrower, purpose and structure of investment as well as available HBOR’s sources of finance. It is possible to finance up to 75% of the estimated investment value, VAT not included*

For loans intended for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County:
- minimum loan amount is EUR 30,000
- maximum loan amount can be up to 100% of the estimated value of investment, including VAT (except for loans with interest subsidised under the NRRP** funds), provided that financing of VAT for the borrowers that operate within the VAT system is possible only through the award of de minimis aid. In such a case, VAT has to be allocated to working capital in the breakdown of investment contained in the loan application;

For loans with the purpose of purchasing a business share in a foreign company: the maximum amount of the loan is not limited, but depends on the specific features and creditworthiness of the borrower as well as the available sources of HBOR finance

*HBOR can consider financing of the estimated investment value, VAT included, if the borrower delivers goods or provides services that are excluded from the VAT calculation or for the borrowers not operating within the VAT system, except for loans with interest subsidy under the NRRP funds.

**NRRP - National Recovery and Resilience Plan

5. Loan Currency

EUR
As an exception, for loans with the purpose of purchasing a business share in a foreign company: HBOR may consider approval of loans in currencies published on the official exchange rate list for the Croatian National Bank clients

6. Interest Rate

Loans in the amount of up to, and including, EUR 400,000.00	Possibilities of reduction	Criteria
3,40% p.a., fixed for investments in special areas of the Republic of Croatia and/or agricultural activity and/or green projects and/or digitalization and/or research, development and innovation (RDI) and/or infrastructure and/or for exporters* that are market competitive*	up to 2 percentage point	with subsidy granted by County / City / Municipality
3,90% p.a., fixed for other investments

Loans in the amount of up to, and including, EUR 400,000.00

Possibilities of reduction

Criteria

3,40% p.a., fixed

for investments in special areas of the Republic of Croatia and/or agricultural activity and/or green projects and/or digitalization and/or research, development and innovation (RDI) and/or infrastructure and/or for exporters* that are market competitive*

up to 2 percentage point

with subsidy granted by County / City / Municipality

3,90% p.a., fixed

for other investments

Loans in the amount above EUR 400,000.00	Possibilities of reduction	Criteria
Interest rate for each individual loan is determined by HBOR (for direct loans), or by commercial bank (for loans via commercial banks), where the so determined interest rate can be subsidised/reduced, depending on available funds: for micro, small and medium sized enterprises (SME) by 1.50 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters, by 1.00 p.p.* for other investments for mid-caps and large enterprises by 1.00 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters, by 0.50 p.p.* for other investments.	up to 2 percentage point	with subsidy granted by County / City / Municipality

Loans in the amount above EUR 400,000.00

Possibilities of reduction

Criteria

Interest rate for each individual loan is determined by HBOR (for direct loans), or by commercial bank (for loans via commercial banks), where the so determined interest rate can be subsidised/reduced, depending on available funds:

for micro, small and medium sized enterprises (SME)

by 1.50 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters*,
by 1.00 p.p. for other investments

for mid-caps and large enterprises

by 1.00 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters*,
by 0.50 p.p. for other investments.

up to 2 percentage point

with subsidy granted by County / City / Municipality

For business entities investing in the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County	Possibilities of reduction	Criteria
loans in the amount of up to EUR 1,000,000.00 2,00% p.a., fixed	up to - 2 percentage point	with subsidy granted by County / City / Municipality
loans in the amount of EUR 1,000,000.00 and above Interest rate for each individual loan is determined by HBOR (for direct loans) or by commercial bank (for loans via commercial bank), where the so determined interest rate can be subsidised/reduced, depending on available funds: FOR MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES (SME) by 1.50 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters, by 1.00 p.p.* for other investments FOR MID-CAPS AND LARGE ENTERPRISES by 1.00 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters, by 0.50 p.p.* for other investments	up to - 2 percentage point	with subsidy granted by County / City / Municipality

For business entities investing in the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County

Possibilities of reduction

Criteria

loans in the amount of up to EUR 1,000,000.00

2,00% p.a., fixed

up to - 2 percentage point

with subsidy granted by County / City / Municipality

loans in the amount of EUR 1,000,000.00 and above

Interest rate for each individual loan is determined by HBOR (for direct loans) or by commercial bank (for loans via commercial bank), where the so determined interest rate can be subsidised/reduced, depending on available funds:

FOR MICRO, SMALL AND MEDIUM-SIZED ENTERPRISES (SME)

by 1.50 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters*,
by 1.00 p.p. for other investments

FOR MID-CAPS AND LARGE ENTERPRISES

by 1.00 p.p. if investing in special areas of the Republic of Croatia and/or agricultural activities and/or green projects and/or digitalisation and/or RDI and/or social infrastructure and/or are exporters*,
by 0.50 p.p. for other investments

up to - 2 percentage point

with subsidy granted by County / City / Municipality

Regardless of the amount, on loans for the purpose of purchasing a business share in a foreign company or for the purpose of capital investment in a foreign company: interest rate for each individual loan is determined by HBOR (for direct loans) or by commercial bank (for loans via commercial bank), where the so determined interest rate can be subsidised/reduced by 1.50 p.p., depending on available funds.

In certain cases, the stated interest rates and/or interest rate reductions can be even different, depending on the aid rules.
The maximum possible amount of interest rate subsidy for an individual loan is generally EUR 500,000.00.**

*The criteria for establishing special areas of the Republic of Croatia, agricultural activities, green projects, digitalization, research, development and innovation (RDI), social infrastructure and investments of exporters are defined by the General Eligibility Criteria that make a constituent part of this programme.
**Exceptionally, in case of direct HBOR loans for projects exceeding EUR 10,000,000.00, with a repayment period longer than 12 years, which significantly contribute to the achievement of HBOR's strategic goals, HBOR may approve an interest subsidy of up to EUR 1,000,000.00.

7. INTEResT RATE ON LOANS WITH SUBSIDY UNDER THE NRRP* FUNDS

For borrowers and loans that meet the conditions prescribed by the Operational Programmes for the Implementation of Financial Instruments under the NRRP, part of the regular interest rate is subsidised by HBOR in its own name and for the account of the Republic of Croatia as follows:

For investments in green and/or digital transition: up to 75% of regular interest rate, but to a maximum of 3.00 p.p.
For investments in special areas of the Republic of Croatia and/or RDI (research, development and innovation): up to 65% of the regular interest rate, but to a maximum of 3.00 p.p.
For other investments in competitiveness and resilience: up to 50% of the regular interest rate, but to a maximum of 3.00 p.p.

Whereby the regular interest rate is determined as follows:

In the case of on-lending through a commercial bank, the interest rate is determined by the bank in accordance with its internal documents
In the case of direct lending to a borrower:
- On loans in the amount of up, and including, EUR 400,000.00:
  - in accordance with item 6 of this programme
- on loans above EUR 400,000.00:
  - interest rate for each individual loan is determined by HBOR
- On loans to business entities investing in the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County:
  - in accordance with item 6 of this programme

The highest possible amount of subsidised interest for a single loan is:

EUR 500,000.00 for micro, small and medium-sized enterprises
EUR 1,000,000.00 for mid-caps and large enterprises.

*NRRP - National Recovery and Resilience Plan

8. Fees

Variable, in accordance with the Ordinance on Fees for HBOR Services valid on the day of calculation:

Loan application fee: 0.50% on the contracted loan amount*
Commitment fee: 0.25% on the contracted undisbursed loan amount**

and other fees in accordance with the Ordinance on Fees for HBOR Services valid on the day of calculation.

On loans intended for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County:

no loan application processing fee
no commitment fee
no fee for changing the terms and conditions of loan

and other fees in accordance with the Ordinance on Fees for HBOR Services valid on the day of calculation.

Loan application processing fee is not charged on direct loans under NRRP guarantee.*

*Financial instrument: Guarantee Fund for Loans to Mid-Caps and large business entities.

9. Period and Manner of Loan Disbursement

Generally, up to 12 months. Depending on the purpose and the 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 seller/supplier/contractor based on the documentation for utilisation of loan for earmarked purposes
Part of the loan intended for the financing of working capital can be disbursed to the account of the borrower, with obligatory justification by documentation evidencing the use of loan for earmarked purposes
For loans intended for the recovery from the consequences of earthquake and for the economic development of Sisak-Moslavina County, it is allowed to make a refund for borrowers’ investments made after the earthquake, until the submission of loan application (for such a refund, commercial banks are not obliged to notify HBOR in advance).

10. Period of Repayment

Up to 14 years, with up to 3-year grace period included, depending on the purpose and structure of investment

As an exception to the mentioned, depending on the purpose and structure of investment, it is possible to approve the following repayment and grace periods:

For the planting and/or restructuring of perennial crops in agriculture: up to 15 years, including grace period of up to 5 years
For investments in tourism or if the investment study indicates the need for longer maturity and/or grace period: up to 17 years, including grace period of up to 4 years.

11. Manner of Repayment

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

12. Collateral

Lending in cooperation with commercial banks: collateral is determined by the commercial bank
Risk sharing model: collateral is determined by the commercial bank and HBOR
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, guarantees of HAMAG-BICRO and other security instruments customary in banking operations), and the risk assessment of the investment and the borrower

13. Related Documentation / Schedules

14. Others

In the implementation of financial instruments, the beneficiaries of EU funds and other third parties that provide information on EU programmes use the emblem of the EU with the funding statement in the following wording: “Funded by the European Union - NextGenerationEU” available at the link: https://ec.europa.eu/regional_policy/en/information/logos_downloadcenter/
Sample generator: https://www.euinmyregion.eu/generator

The views and opinions expressed are solely those of the author and do not necessarily reflect the official views of the European Union or the European Commission. Neither the European Union nor the European Commission can be held responsible for them.