Loans to legal entities

1.       

Loan product

Commercial loan, lease

2.      

Target area

• Construction/renovation/expansion of power plants based on renewable energy (REPPs)
• Energy-efficient/energy-saving investments (EEI)

3.      

Currency

AMD

4.      

Potential borrowers

RA resident legal entities and sole proprietors

5.    

Purpose

• Purchasing fixed assets/ making capital investments,
• Increasing working capital,
• Making other investments that meet the Program requirements

6.    

Repayment period

• Up to 120 months – for REPPs
• Up to 60 months – for EEIs

7.     

Principal grace period (optional)

Up to 6 months

8.     

Annual interest rate

• For REPP - 9.5%,
• For EEI - 10.25%

9.     

Annual actual interest rate

• Up to 10% -for REPP
• Up to 10.75% - for EEI

10.   

Loan/ease disbursement method

• For REPPs- in a lump-sum or in several tranches; if the funds are  disbursed in several tranches, the amount of the last tranche cannot exceed 20% of the contractual loan amount, as envisaged under the Program.
• In case of EEI – in a lump sum.

Each tranche will be disbursed in a non-cash manner, by transferring the relevant amount to the Borrower’s bank account. In case of lease – each tranche will be transferred to the vendor’s bank account.

11.   

Loan/lease amount utilization method

For loans – non-cash/in cash, for leases – only by transferring the funds to a relevant bank account

12.   

Repayment schedule

• Annuity
• Flexible

13.   

Sectoral restrictions

https://www.ifc.org/en/what-we-do/sector-expertise/sustainability/ifc-exclusion-list-2007

14.   

Collateral

Real and movable property,

Funds in deposit or current accounts,

Standard gold bars or gold scrap,

Short-term government bonds or other securities.

If necessary and available – also current assets and finished goods (with consideration of their market liquidity or Loan-to-value ratio, loan period, customer’s creditworthiness, etc.). Additional requirement: the surety bonds issued by the business founders/beneficial owners are required. Besides, as additional security the Bank may request

surety bonds issued by other individuals and/or legal entities.

15.   

Acceptable level of Loan-to-value ratio

For real property and other fixed assets – up to 70% of their appraised value.

For short-term government bonds – up to 95% of their par value.

For other securities – up to 70% of their appraised value.

For standard gold bars and scrap of other precious metals – up to 95% of their appraised value.

For cash (in deposit and current accounts) – up to 90%.

For current assets – up to 50% of their appraised value.

16.   

Security

Loan security:

• A surety bond issued by a legal entity or an individual for loans under AMD 10 million,
• Collateral – for loans equal to or above AMD 10,000,001.

Lease security:

• Apart from the leased asset, the Bank may request surety bonds issued by  legal entities, individuals,  or other collateral.

17.   

Surety

RA resident legal entity (including sole proprietor), individual

18.   

Surety requirements (only for loans)

• If the surety is a legal entity – at least 6-month registered business activities.
• If the surety is an individual – stable sources of income (salary, leased out property, dividends, etc.) and/or a real property owner.

19.   

Surety’s credit history requirement (only for loans)

If the surety is an individual:                    

• Positive credit history (for the last 12 months the total number of delayed payments should not exceed 30 days and a single delayed payment should not exceed 15 days),
• As of the inquiry date, absence of classified active loans and overdue loans  and surety bonds and/or assets worth more than AMD 100,000 that have been arrested by the RA Compulsory Enforcement Service  (If the arrested assets are worth more than AMD 100,000, the customer may submit documents supporting their relevant payments).

If the surety is a legal entity:

• Positive credit history (for the last 12 months the total number of delays should not exceed 30 days and a single delayed payment should not exceed 15 days),
• The revenue reported in the tax return for the last 6 months must be above AMD 100,000,
• As of the inquiry date, absence of classified active loans and overdue loans  and surety bonds and/or assets worth more than AMD 100,000 that are arrested by the RA Compulsory Enforcement Service  (If the arrested assets are worth more than AMD 100,000, the customer may submit documents supporting their relevant payments).

20.   

Borrower’s business activities and credit history requirements

• At least a 6-month registered business.
• For the last 12 months absence of classified credit liabilities, while the total number of payment delays must not exceed 30 and a single delayed payment must not exceed 15 days).
• Absence of overdue and/or classified credit liabilities (including those related to the issued surety bonds).
• For the last 36 months absence of substandard credit liabilities and those classified under stricter categories.
• For loans backed by surety bonds only – the number of borrower’s loans not secured by collateral (without the expected loan) must not exceed 5, while the total outstanding balance must not exceed AMD 10,000,000 or a foreign currency equivalent. It should be noted that lines of credit and overdraft amounts are included in the calculation with their contractual amounts. These details should be kept private.

21.   

Payments and charges

Fee for loan/lease application review – 0 AMD,

Fee for credit account service – 0 AMD,

For disbursement of the loan amount in cash – cash withdrawal fee according to the applicable fees.

22.   

Insurance

• For loans: on an as-needed basis.
• For lease – pursuant to the Bank’s opinion.

23.    

Penalty for prepayment of the loan/lease principal amount

Not applicable

24.    

Penalty for late payment of the principal and interest amounts

For each day the liabilities are past due the Bank can charge a penalty starting the first day of delayed payment.

• For past due principal amount - 0.015% per day,
• For past due interest - 0.1% per day.

25.   

State duties and other charges

• State duties payable to RA state competent bodies for registration and ratification of collateral agreement.
• The fee charged by collateral appraisal entity, according to the fees set by Bank partner - independent appraisal agency.

26.  

Other provisions

Loan applications will not be approved unless they meet the Program requirements ***.

27.   

Prior to approval of the loan/lease application, the Bank will analyze the customer’s business activities for the last 6 months.

28.   

The details of utilization of the loan/lease amount shall be fully and thoroughly documented.