Entrepreneurs have received €179 million in loans, sureties from Kredex
Since the beginning of April, the Kredex foundation has concluded 67 agreements on direct loans and 120 agreements on loan guarantees within the framework of crisis measures, while Estonian companies have been financed in the total amount of €179 million.
Together with regular services, a total of 312 loan agreements have been concluded in the amount of €223 million since the beginning of the emergency situation, Kredex said.
"Based on the feedback received from entrepreneurs and Kredex's recommendations, the crisis measures have been amended and supplemented in the last month, and the conditions have become more favorable for entrepreneurs, which has accelerated the flow of money to applicants," Minister of Foreign Trade and IT Raul Siem said in a press release.
Altogether 84 applications for extraordinary direct loans have been approved in the sum of €127 million, of which one company, Tallink, has received a loan in the amount of €100 million as a nationally important project.
As regards emergency guarantees, Kredex has approved 125 applications in the amount of €82 million. In addition, Kredex has issued a standard loan guarantee for 125 contracts in the amount of €44 million during this period.
CEO of Kredex Lehar Kütt said that the terms of the extraordinary working capital and investment loan changed in mid-June and the feedback from entrepreneurs has been positive. "We significantly lowered interest rates on loans and eased collateral requirements," he said.
"Despite the large number of applications, there is a sufficient buffer to support entrepreneurs even in the event of a negative future scenario, meaning if the crisis continues and the economic environment deteriorates. The limits set by the government for Kredex take into account that the crisis may become long-term and therefore we are also ready for possible negative developments in the fall," Kutt added.
The CEO said that, at the suggestion of banks, business organizations and Kredex, the government decided on June 18 to also raise the credit loss indemnity limit for loan guarantees, as a result of which banks could in future have a greater interest in lending to companies with the help of guarantee measures.
In accordance with the plan approved by the government, the maximum rate to which credit losses under the extraordinary loan underwriting by Kredex are compensated rose to 30 percent for new loans issued by banks. To the compensation of loan losses related to existing loans the current ceiling of 15 percent applies.
According to Kutt, the quality of applications submitted to Kredex and thus the speed of decision-making has increased compared to a couple of months ago.
"Today, it can be said that a properly formulated application that meets the conditions of the measure will be approved in up to 10 days," Kutt said, recommending that applicants, in addition to the information on the website, also seek prior advice from their home bank or Kredex's client managers, if necessary.
Download the ERR News app for Android and iOS now and never miss an update!
Editor: Katriin Eikin Sein