Individual Guarantees for Rural Development

FINANCIAL INSTRUMENTS

Individual Guarantees for Rural Development

The Individual Guarantees for Rural Development is a financial instrument directed towards micro, small and medium-sized enterprises (MSMEs) and it is co-financed through the European Agricultural Fund for Rural Development. With this financial instrument and through financial institutions HAMAG-BICRO will make available to MSMEs in agriculture, agricultural processing and forestry sector its guarantee covering part of the loan or lease principal under the terms of the Croatia’s Rural Development Programme 2014 - 2020 (hereinafter: PRR 2014-2020) and the Financing Agreement executed on 18 April 2018 between the Ministry of Agriculture, the Paying Agency for Agriculture, Fisheries and Rural Development (PAAFRD) and HAMAG-BICRO, for the defined measures/sub-measures /types of operation.

CONDITIONS FOR THE INDIVIDUAL GUARANTEES FOR RURAL DEVELOPMENT FINANCIAL INSTRUMENT

FEATURE / INSTRUMENT	Individual Guarantees for Rural Development
Eligible borrowers	Micro, small and medium-sized enterprises according to measures set in the RDP 2014-2020 eligible for financing under this financial instrument.
Maximum guarantee	EUR 1,300,000
Maximum rate of guarantee	Up to 70% Up to 80% for young farmers* and the diary sector
Minimum guarantee period	12 months
Maximum guarantee period	15 years
Purpose of the loan for which the guarantee is granted	Net working capital and linked working capital
Share of working capital	Up to EUR 200,000, i.e., up to 30% of the total eligible costs, whichever is higher
Risk premium fee (guarantee issuance fee)	0.25% of the total guarantee approved 0.10% for young farmers and the diary sector
Scope of guarantee	Loan principal
Aid	De minimis aid and/or state aid (ABER / GBER) and or public aid in accordance with Annex II to Regulation (EU) No. 1305/2013
Security instruments	Debentures of the entity, owner and other security instruments according to risk assessment

*’Young farmer’ means a person who is no more than 40 years of age (up until the day before turning 41) at the moment of submitting the application, who possesses adequate occupational skills and knowledge and is setting up for the first time in an agricultural holding as head of that holding (has the status of a holder/manager of an agricultural holding or majority ownership of a business).

The geographical scope of the investment, in terms of implementation, is the entire territory of the Republic of Croatia, excluding urban centers such as Zagreb, Osijek, Rijeka and Split.

Types of investment that are not eligible for a guarantee

Financing of VAT refund
Refinancing of current liabilities
Cost of land purchase that exceeds 10% of the total investment
Loan interest repayment
Non-eligible costs under state aid legislation
Bridge loans, business account framework loans, revolving loans, others loans in the form of renewable credit lines, framework for guarantees, loans etc., loans in the form of mezzanine loans, subordinated debt or quasi-equity
Personal investments
Construction or purchase of housing and business properties for sale or rent, except for the tourist activity of the applicant
Purchase of immovable and movable property from related parties; definitions of related parties and entities are provided in Article 3 of Annex I to the Commission Regulation (EU) No 651/2014 (hereinafter: GBER) and International Accounting Standard 24
Purchase of movables for sale
Buying commercial property under construction
Buying shares in other entities.