KredEx changed their conditions for emergency working capital and investment loans; including lowering interest rates, a relaxation of the collateral requirement, and specifications on requirements for loan applications.
KredEx confirmed new interest rates for emergency working capital loans and investment loans at 12 months of Euribor plus two percent a year, specified requirements for loan applications, and alleviated requirements on collateral, the company announced.
KredEx's emergency loans are meant to provide businesses with support in their battle to overcome challenges caused by COVID-19.
"KredEx's decision to change the conditions of emergency loans makes them more accessible and affordable to businesses," said Lehar Kütt, CEO of KredEx, in a press release.
Kütt said that the specified requirements should allow for loans to reach businesses faster. "The need to change loan conditions comes from the changed situation, the experiences garnered during the implementation of the crisis measures to date and the feedback received from business operators," Kütt noted.
The changes to the requirements concerning how the loans are secured make it sufficient for the anticipated result of the realization of the collateral provided by the business operator to cover at least 10 percent of the borrowed amount in the case of operating capital loans up to 500,000 euros in size.
With investment loans and bigger operating capital loans the anticipated amount received through the sell-off of collateral must equal at least 50 percent of the borrowed amount.
Applications for loans under the new conditions are accepted beginning from June 10. Simultaneously, applications for loans under the old terms can be filed until June 16.
With applications filed until June 16, either the old or the new terms and conditions will be applied to the loan depending on which are more favorable for the borrower.
The positive decisions on lending made as part of the crisis mitigation measures to date will be subjected to a review and if the business operator and the application qualify for the new conditions and these are significantly more favorable for the business operator, Kredex will make a proposal for the lending decision made or the loan agreement already concluded to be amended.
Editor: Kristjan Kallaste