Export loan
Offer foreign buyers a long payment term and get your money sooner.
In a large export deal, the buyer may want to pay for the goods over several years. For your company, this can mean a large sum of money is tied up in a single transaction for a long time. The export loan helps you offer the foreign buyer a payment term of at least two years, while your company receives a large part of the transaction value after the goods are delivered. This lets you offer the foreign customer better payment terms without having to wait years for the money to come in.
NB! The export loan comes with credit insurance, which helps mitigate the credit and political risks related to the foreign buyer.
up to €7.5 million for financing production
The export loan can help if you want to:
- offer a foreign buyer a long payment term;
- get the money from an export deal into your business sooner;
- accept larger export orders;
- finance the production of goods before delivery;
- reduce the risk of a foreign buyer not paying.
Benefits
The export loan helps companies find new customers and grow their export volumes.
For who?
Service is suitable if
- the applicant is sustainable and solvent; and
- the applicant’s equity complies with the requirements of the Commercial Code; and
- the applicant is entered in the Estonian Commercial Register and the required information has been submitted to it; and
- the applicant does not have any unresolved payment arrears and no overdue tax debts; and
- the owners and members of the board of directors of the applicant are reliable and competent; and
- the applicant has experience with similar export projects.
Important conditions
- primary production of agricultural products, fishing and aquaculture, forestry activities
- manufacture, processing and marketing of tobacco (and related products)
- manufacture, processing and marketing of weapons and ammunition
- the loan applicant is owned by a person who is resident in a country or territory that is considered a non-cooperative jurisdiction under § 101 of the Income Tax Act
- The maximum possible amount for financing the credit period of a foreign buyer is 15,000,000 euros per foreign buyer, but not exceeding the insured credit limit.
- For financing the production of export goods, the maximum possible amount is 7,500,000 euros, but not exceeding the insured production risk amount.
- At least equal to the market interest rate.
- The interest rate consists of a variable component, which is the base rate calculated by the European Commission, plus a fixed component. If the variable component is below 0% per year, i.e. negative, a variable component of 0% (zero per cent) per year is applied.
- When financing the foreign buyer’s credit period, the fixed component depends on the foreign buyer’s risk rating and is generally 1.6–2.2% per year.
- When financing the production period, the fixed component depends on the applicant’s risk rating and the collateral offered, and is generally 1.6–6.5% per year.
- The contract fee is 1% of the loan amount
- The contract amendment fee is 0.2% of the loan balance
- Generally 2–10 years.
- The foreign buyer makes payments at least twice per year
1. Insuring the credit and political risk related to the foreign buyer, and designating EIS as a beneficiary in the insurance contract. The insurance cover for credit and political risk must be at least 95% of the balance of the credit granted to the foreign buyer.
2. Assigning the claim arising from the export transaction against the foreign buyer to EIS as of the delivery of the goods to the foreign buyer.
3. Insuring production risk in the case of financing the production of goods sold to an external buyer.
4. Provision of other collateral in favour of EIS, if necessary.
Application process
The exporter submits an application for the export loan and export credit insurance to KredEx Krediidikindlustuse AS. The application must be accompanied by:
- financial forecasts;
- an overview of the company and a description of the transaction;
- (audited) annual report for the ended financial year and an interim report for the current year that is not older than three months.
Good to know
- A precondition for issuing the loan is that the credit and political risks related to the foreign buyer are insured with KredEx Krediidikindlustus.
Service Information and Application Process
Service is suitable if
- the applicant is sustainable and solvent; and
- the applicant’s equity complies with the requirements of the Commercial Code; and
- the applicant is entered in the Estonian Commercial Register and the required information has been submitted to it; and
- the applicant does not have any unresolved payment arrears and no overdue tax debts; and
- the owners and members of the board of directors of the applicant are reliable and competent; and
- the applicant has experience with similar export projects.
- primary production of agricultural products, fishing and aquaculture, forestry activities
- manufacture, processing and marketing of tobacco (and related products)
- manufacture, processing and marketing of weapons and ammunition
- the loan applicant is owned by a person who is resident in a country or territory that is considered a non-cooperative jurisdiction under § 101 of the Income Tax Act
- The maximum possible amount for financing the credit period of a foreign buyer is 15,000,000 euros per foreign buyer, but not exceeding the insured credit limit.
- For financing the production of export goods, the maximum possible amount is 7,500,000 euros, but not exceeding the insured production risk amount.
- At least equal to the market interest rate.
- The interest rate consists of a variable component, which is the base rate calculated by the European Commission, plus a fixed component. If the variable component is below 0% per year, i.e. negative, a variable component of 0% (zero per cent) per year is applied.
- When financing the foreign buyer’s credit period, the fixed component depends on the foreign buyer’s risk rating and is generally 1.6–2.2% per year.
- When financing the production period, the fixed component depends on the applicant’s risk rating and the collateral offered, and is generally 1.6–6.5% per year.
- The contract fee is 1% of the loan amount
- The contract amendment fee is 0.2% of the loan balance
- Generally 2–10 years.
- The foreign buyer makes payments at least twice per year
1. Insuring the credit and political risk related to the foreign buyer, and designating EIS as a beneficiary in the insurance contract. The insurance cover for credit and political risk must be at least 95% of the balance of the credit granted to the foreign buyer.
2. Assigning the claim arising from the export transaction against the foreign buyer to EIS as of the delivery of the goods to the foreign buyer.
3. Insuring production risk in the case of financing the production of goods sold to an external buyer.
4. Provision of other collateral in favour of EIS, if necessary.
The exporter submits an application for the export loan and export credit insurance to KredEx Krediidikindlustuse AS. The application must be accompanied by:
- financial forecasts;
- an overview of the company and a description of the transaction;
- (audited) annual report for the ended financial year and an interim report for the current year that is not older than three months.
- A precondition for issuing the loan is that the credit and political risks related to the foreign buyer are insured with KredEx Krediidikindlustus.