HAMAG BICRO COVID-19 loan schemes for working capital
In December of 2020 the implementation of measures to help micro, small and medium-sized enterprises affected by the coronavirus pandemic continued as a result of cooperation between the Croatian Agency for Small Business, Innovation and Investment (HAMAG BICRO) and the Croatian government.
The COVID-19 working capital loan scheme is financed from the European Regional Development Fund, with HRK 1.3 billion made available to entrepreneurs. The maximum loan amount is HRK 380,000 with an interest rate of 0.25%. HAMAG BICRO will directly approve working capital loans.
The purpose of the HAMAG COVID-19 Working Capital Loan scheme
The purpose of the HAMAG BICRO loan scheme is to ensure additional liquidity to micro, small and medium-sized enterprises which actively operated for at least 3 months in 2019 and which meet the following criteria:
- They were closed pursuant to the decision adopted by the Civil Protection Headquarters of the Republic of Croatia of 27 November 2020, or
- They recorded income decline of 60 % or more in 2020 in comparison to 2019, or
- They recorded income decline of 20 % or more in 2020 in comparison to 2019, were located in assisted areas as per the development index, i.e. regional self-government units classified in the first group as per the Decision of the Government of the Republic of Croatia on the classification of local and regional self-government units according to the level of development: Brod-Posavina County, Bjelovar-Bilogora County, Lika-Senj County, Vukovar-Srijem County, Sisak-Moslavina County and Virovitica-Podravina County.
Main eligibility criteria
The main eligibility criteria at the moment of application pertain to entities that:
- are classified as “small enterprise” as laid down in Article 1 of the Annex to the Recommendation by the European Commission 2003/361/EC,
- generate profit, i.e. are registered as companies or sole proprietorship, natural persons engaging in free profession activities, institutions, cooperatives or other similar entities that perform economic activities for the purpose of generating profit,
- are more than 50% in private ownership,
- have no giro account blocked for more than 45 days in the last 6 months,
- are not a company in difficulty as defined by the state aid rules,
- have at least one full-time employee,
- duly meet the existing payment obligations, i.e. are not unable to make timely payments or settle any other loan / leasing / credit obligation,
- do not have a previously approved COVID-19 loan for working capital.
Unacceptable activities of loan beneficiaries
Loan beneficiaries whose main activity and / or investment activity falls into the following categories are not eligible for funding:
- Fishery and aquaculture (production, processing and placing on the market of fishery and aquaculture products),
- Primary agricultural production (production of soil products or livestock products without carrying out additional activities that might change the nature of such products),
- Production and trade in tobacco and distilled alcoholic beverages and related products,
- Production and trade in weapons and ammunition,
- Casinos and similar enterprises,
- Limitations of IT sector – research, development and technical applications pertaining to electronic data programmes or solutions which result in:
- Supporting all activities included in the restricted sectors referred to in the previous items,
- Online games of chance and casinos,
- or whose purpose is to enable:
- Illegal access to electronic data networks,
- Illegal upload of electronic data,
- Limiting the bio-science sector services – research, development or technical applications related to human cloning for research / therapeutic purposes or genetically modified organisms (“GMO”).
Loan terms and repayment plan
The maximum amount of this HAMAG BICRO loan is HRK 380,000 with a fixed interest rate of 0.25% for the entire loan repayment period. The loan use period is 6 months, the allowed grace period is up to maximum 12 months and the repayment period is up to 5 years, including grace period. The collateral instrument is the borrower’s debenture.
With this loan, it is acceptable to finance investments in working capital, including VAT. Refinancing of existing credit obligations / leasing or payment of obligations incurred before 2020, as well as refund of previously paid obligations, is not allowed.
The loan funds are paid into the special account of the entrepreneur and must be used for the intended purpose.
Loan beneficiaries do not pay a loan processing fee and the submission of applications is possible until the funds are used, but no later than 31 December 2021.
For more information visit the following link.