Indirect development loan

Indirect development loan is granted by SNCI via local authorized banks

Beneficiaries

Indirect development loans can be granted to companies realizing projects concerning business creation, innovation, expansion, replacement or takeover, and which will also have a substantial impact on national economic development.

Beneficiaries shall possess a valid business permit issued by the Ministry of the Economy.

Purpose

Indirect development loans are intended to finance depreciable tangible and intangible assets, as well as land which is used exclusively for business purposes.

Provided that the beneficiary establishes a business plan, the following projects are eligible for an indirect development loan:

  • the expansion of current business activities;
  • the purchase and replacement of depreciable tangible and intangible assets;
  • the development and communication of products/services, processes or organizational methods that are new or substantially improved/modified as compared to the latest technology in the industry concerned, and which carry a risk of technical or industrial failure;
  • the startup or transfer of a business.

This loan cannot be combined with other SNCI instruments.

Eligible costs

Investments in depreciable assets and negative operating cash flows carried out within the business development project are eligible for an indirect development loan.

Depreciable assets and negative operating cash flows include, for example, land; buildings; professional equipment, machinery and facilities; personnel expenditure; patent filing fees; expenses related to contract research; use of databanks, technical libraries and laboratories; acquisition of patents/ licenses; feasibility studies; innovation support services like market research; implementation of new regulatory standards; testing and certification; and marketing/promotion costs for new products/services during one budget year. Production and distribution costs are excluded.

Loan amount

The indirect development loan must be no less than EUR 12,500 and no higher than EUR 10,000,000. The SNCI’s share cannot exceed 40% of eligible costs, taking into account the overall debt to SNCI.

At least 20% of investments and expenses shall be co-financed by the business’s own resources.

In case of projects with eligible costs below EUR 250.000, co-financing by own resources shall be at least 15%.

The amount of the SNCI loan(s) cannot exceed the total amount of equity held by the beneficiary, nor can it exceed the accumulated amount brought by commercial banks financing the project.

Duration

The maximum duration of the loan is 10 years. Depending on project requirements, it can be extended by the length of the disbursement and the grace periods, which in total cannot exceed 3 years.

Interest rate

The interest rates are fixed by the SNCI’s Board of Directors on the basis of interest rates on the capital market, as well as on the basis of the SNCI’s refinancing costs. The interest rate currently stands at 1.375% for a medium-term loan (5 years), and at 1.625% for a long-term loan (6-10 years).

Disbursement

Loans are disbursed upon written request of the intermediary bank.

Repayment

Repayment is made in equally distributed quarterly installments. Early repayments are possible and incur no fees or penalties.

Guarantees

SNCI shall benefit from the same guarantees as those granted to the beneficiary’s other creditors.

Application

Applications for indirect development loans must be submitted to SNCI via one of the local authorized banks.