Loans to legal entities

Micro business loan

Currency

AMD, USD, EUR

Borrowers

  • AMD 500.000 - 5.000.000 or equivalent in foreign currency – to RA resident legal entities and individual entrepreneurs who are running registered activity for at least 6 months
  • AMD 5.000.001 - 7.000.000 or equivalent in foreign currency - to RA resident legal entities and individual entrepreneurs who are running registered activity for at least 12 months

Limits

AMD 500.000 - 7.000.000 or equivalent in foreign currency

Usage method of the granted loan

Cash or non-cash

Repayment period

  • For loans with limit of AMD 500.000 - 3.000.000 or equivalent in foreign currency - 6-36 months /without early payment penalty/,
  • For loans with limit of AMD 3.000.001 - 7.000.000 or equivalent in foreign currency - 6-60 months /without early payment penalty

Annual interest rate

AMD

Annual interest rate

USD

 1.     

EUR

 2.     

Penalty for loan principal and/or interest overdue

  • For overdue principal - 0,015 % daily,
  • For overdue interest - 0,1 % daily

Security: for loans not exceeding AMD 1,000,000 or equivalent in foreign currency

  • If the borrower has a credit history (there is at least one credit facility the repaid principal amount of which exceeds the expected loan amount), then tax reports might not be submitted and a third party guarantee might not be requested
  • In case if the borrower does not have a credit history, and as per submitted tax reports the quarterly turnover for the last 6 months is AMD 500,000 or above, third party guarantee might not be requested
  • In case if the borrower does not have a credit history, and as per submitted tax reports the quarterly turnover for the last 6 months is less than AMD 500,000, at least one physical individual’s guarantee is required. Guarantor should have a stable income reflected in the system of Nork Informative Analytical Center or be a property owner.

Security: for loans of AMD 1,000,001-5,000,000 or equivalent in foreign currency

 

  • If as per borrower’s submitted tax reports the quarterly turnover for the last 6 months is less than AMD 500,000, at least two physical individuals guarantee is requested. The guarantors should have a stable income reflected in the system of Nork Informative Analytical Center or be a property owner.
  • If as per borrower’s submitted tax reports the quarterly turnover for the last 6 months is AMD 500,000 or more, at least one physical individual’s guarantee is requested. The guarantor should have a stable income reflected in the system of Nork Informative Analytical Center or be a property owner

Security: for loans of more than AMD 5,000,001 or equivalent in foreign currency

  • If as per borrower’s submitted tax reports the quarterly turnover for the last 6 months is less than AMD 700,000, at least three physical individuals’ guarantee is requested. The guarantors should have a stable income reflected in the system of Nork Informative Analytical Center or be a property owner.
  • If as per borrower’s submitted tax reports the quarterly turnover for the last 6 months is AMD 700,000 or more, at least two physical individuals’ guarantee is requested. The guarantors should have a stable income reflected in the system of Nork Informative Analytical Center or be a property owner.
  • For loans of AMD 5,000.001 and more additional pledge is required for the exceeding amount:
    • Car, technical equipments, working capital and a complete product
    • As a pledge cars up to 15 years can be pledged (Russian-made card up to 7 years). Car insurance might be required each year for the loan amount for which the car is serving as a pledge. 
    • Loan to value ratio should comprise up to 70% for loans of more than AMD 5.000.001

Fees

  • Loan application review fee – 1% of the loan amount
  • In case if the loan amount is received in cash, encashment fee is applied according to tariffs of the Bank

Limitations

  • Borrower’s total number of overdue days for the past 6 months should not exceed 20 days, as well as for the period the borrower should not have loans with substandard or stricter classification
  • For the previous 6-24 moths the borrower should not have loans with non-standard or stricter classification
  • Number of unsecured loans of the borrower (without the expected loan) should not be more than 5, and the total outstanding amount should not exceed AMD 5,000,000 and/or equivalent in foreign currency. 
  • As of the day of the inquiry the customer who is submitting loan application should not have classified guarantee, as well as overdue loans.

Analysis

In case of deviation/non-compliance with any of the conditions a simplified business analysis is conducted: creditworthiness assessment is not required.

Acceptable Ratio of Loan-to-Value per Type of Collateral

  • Real property and other fixed assets – up to 70% of the appraised market value,
  • Treasury bills – up to 95% of the nominal value,
  • Other securities – up to 70% of appraised value,
  • Standard gold bars and scrap of precious metals – up to 95% of appraised value,
  • Precious and semi-precious stones – up to 50% of appraised value,
  • Cash (in deposit and current accounts) – up to 90%,
  • Working assets – up to 50% of appraised value,
  • Loans backed by cash flows will be advanced to those who have been our customers for a period of over one year and executed up to 30% of annual cash flows through the current account (loans maturing within a 180-day period).

Timeline for Decision-Making and Extending a Loan

  • The decision will be made within 10 (Ten) banking days upon submission of necessary documents.
  • We will notify you on the decision within 1 (One) banking day orally or, at your request, also in writing.
  • Loan will be advanced to you within 5 (Five) banking days upon completion of pledging process (when the entire package of documents is ready).

Criteria for Taking Decisions on Loan Application

Criteria for Positive Decision-Making:

  • Your adequate creditworthiness according to assessment criteria set in bank's internal guidelines,
  • Trustworthy data and documents submitted to the bank,
  • Positive rating of your commitment and due diligence according to the outcomes of the credit history review and analysis,
  • Liquid collateral according to the criteria set by bank's internal guidelines as well as acceptable ratio of Loan-to-Value,
  • Well-validated purpose of the loan and business-plans.

Criteria for declining a Loan Application:

  • Your inadequate creditworthiness according to assessment criteria set in bank's internal guidelines for assessment of borrowers' creditworthiness,
  • Unreliable data and documents submitted to the bank,
  • Negative rating of your commitment and due diligence according to the outcomes of the credit history review and analysis,
  • Badly justified purposes of the loan and unsupported incomes projected in business plans,
  • Other valid reasons which can affect the ability of the borrower to repay the loan.

Procedures of the loan repayment, interest accrual and payment

  • The loan will be repaid according to the schedule under one of the following schemes, whichever you prefer:
    • “Annuity” plan (equal monthly payments), including variable portions of the principal amount and accrued interest,
    • “Springy” plan (variable monthly payments), including the payment of fixed principal amounts and variable interest.
  • Interest will be accrued on the actual loan balance covering the period of loan disbursement till the day before the due date (no interest will be accrued for the due date).
  • Interest calculation is based on a 365-day year. If the due date is not a business day, this date will be extended to the next business day.
  • Payment can be made in our Head office and all branches (except Erebuni branch).

WARNING!

  • In case of not repaying the principal and interest amount in due time
    • Information about you will be recorded in Credit register (which may be an obstacle for receiving new loans in the future).
    • In case of firm pledge, the pledged property can be SEIZED as stipulated by the law. When repaying the liabilities with the pledge as a result of not fulfilling credit obligations, if the value of the pledge is not sufficient to cover the loan liability, we (according to the acting legislation) have the right to repay the loan liabilities at the expense of other property owned by you (if available).