MoEC subsidizes interest on loans for SMEs

On December 8th 2014, Ministry of Economy and Crafts has signed business cooperation agreements with 22 Croatian commercial banks, based on which the Ministry will subsidize interest rates on commercial bank loans to enable small businesses more favourable loans. Purpose of the loan is financing the current liquidity and permanent working capital. Agreements were signed for the measure “Successful business by using loan”, under the “Achieving success by using loan 2014” program, which will be implemented through the next four years or until the full utilization of the credit potential.

Minister Gordan Maras said that he expects approximately 1,500 loans worth around 300 million HRK to be approved within the new loan program, in which the Ministry will provide funds for subsidizing interest in the amount of 5%. He also noted that the loans for entrepreneurs will be in the range of 30,000 – 200,000 HRK, and for entrepreneurs is most important that their final interest rate must not exceed 3%.

Beside subsidized interest rates, an additional benefit for businesses is that, as collateral for obtaining loans will also be possible to use guarantees of the Croatian Agency for Small Business, innovation and investments (HAMAG-BICRO). It is important to emphasize that, unlike previous measures in which entrepreneurs having the tax debt could not have get those guarantees, now it will be possible. The precondition is that the outstanding tax debt to the state can be up to the maximum of 50% of the requested loan amount.

In addition to the measure for improving the liquidity, loan program “Achieving success by using loan 2014” includes a measure of competitiveness, which enables financing of the purchase, construction, renovation or expansion of business facilities, as well as purchase of new equipment or a new piece of equipment. For both measures combined, it is expected to approve about 2,000 loans with subsidized interest.