Background information

The Estonian Business and Innovation Agency (EBIA, until 2022: Kredex) provides entrepreneurship related measures to support the development of companies as well as job creation. Loan guarantees offered help companies to develop and increase their possibilities to obtain a loan from the bank. Loans can finance investments and working capital of starting businesses, enabling fast growth and development.

Content of measure

There are five main measures in the package, which have slightly different eligibility criteria due to the nature of the measures, targeting both starting and already sustainable companies with growth in mind.

Business loan guarantee ( laenukäendus ) enables a guarantee of investment and working capital loans, leasing transactions and bank guarantees. EBIA prefers to guarantee projects that result in a company expanding, with new jobs being created or a growth in export. The extent of the EBIA guarantee depends on the credit risk of the company. The extent of guarantee is 80% of the loan amount for companies with a credit risk of €5 million (for construction companies up to 60%), 50% for companies with a credit risk between €5-10 million and 60% for companies with a credit risk above €10million. For applicants with over €5 million credit risk, more detailed conditions apply: the goal of the loan has to be either automation of processes, use of renewable energy, improving energy and material efficiency or increasing export potential.

For SMEs the highest credit risk allowed to be available for guarantee is €25 million and for large companies it is €2.25 million.

Capital loan ( kapitalilaen ) is meant for sustainable companies that are growth-oriented and which banks are not prepared to finance due to their low rate of self-financing, operating in a 'risky' sector or having insufficient collateral. EBIA provides capital for the entrepreneur to use. Subordinated loans will conditionally enhance an enterprise’s equity capital which, in turn, enables the enterprise to borrow additional amounts and to develop more quickly. In addition to providing financing that would be otherwise unavailable, the KredEx does not interfere in the management of the enterprise, unlike the case with risk capital funds. The maximum amount of the loan is €2 million and up to 67% of the financed project, but it cannot exceed the company’s equity at the moment of disbursement of the loan. The loan term is generally 3-5 years but can be up to 10 years.

Industry loan ( tööstuslaen ) is designed for SMEs in the areas of processing industry, mining industry, production, transfer and distribution of electrical energy and waste processing and disposal. The loan helps if a bank loan or leasing is used for an investment, but the entrepreneur lacks the required capital for self-financing. It is a subordinated loan that helps to increase the own contribution of the project to the credit institution. The amount of the loan can be up to €2 million, but not more than 40% of the project cost.

Export loan ( ekspordilaen ) is meant for companies wishing to finance export transactions of goods manufactured in Estonia. The export loan helps if a company wishes to offer a long (at least two years) payment term to a foreign buyer. The maximum amount of the loan is €15 million with the term of 2-10 years.

Regional loan ( regionaallaen ) is meant for SMEs making investments outside of the two largest towns in Estonia (Tallinn and Tartu). It is a subordinated loan that helps to increase the own contribution of the project to the credit institution. The maximum amount of the loan is €500,000 but not more than 50% of the project cost with a term of up to 15 years.

Use of measure

In 2021, Estonian Business and Innovation Agency (previously Kredex) guaranteed and financed a total of 511 companies in the amount of €128 million (501 companies and €373 million in 2020 and 411 companies and €77 million in 2019). This made possible for the companies to include additional financing from banks in the amount of €183 million (€481 million in 2020 and €150 million in 2019). The numbers for 2020 and 2021 include COVID-19 related extraordinary financing.

Target groups

Workers	Businesses	Citizens
Does not apply to workers	Applies to all businesses	Does not apply to citizens

Actors and funding

Actors	Funding
National government Company / Companies Other social actors (e.g. NGOs)	European Funds National funds

Social partners

Social partners' role in designing the measure and form of involvement:

	Trade unions	Employers' organisations
Role	Unknown	Unknown
Form	Not applicable	Not applicable

Social partners' role in the implementation, monitoring and assessment phase:

• Unknown
• Main level of involvement: Unknown

Involvement

Unknown

Views and reactions

Unknown

Sources

• 30 December 2010: KredExi roll Eesti majanduse arengus (The role of Kredex in the development of the Estonian economy) (kredex.ee)
• 16 October 2015: Kapitalilaenu tingimused (Conditions of the capital loan) (kredex.ee)
• 23 March 2022: Ettevõtluse ja Innovatsiooni Sihtasutuse majandusaasta aruanne 2021 (Business and Innovation Agency's annual report 2021) (issuu.com)
• 15 January 2024: Tööstuslaenu tingimused (Conditions for the industry loan) (kredex.ee)
• 15 January 2024: Regionaallaenu tingimused (Conditions for the regional loan) (kredex.ee)
• 26 February 2024: Ekspordilaenu tingimused (Conditions for the export loan) (kredex.ee)
• 22 March 2024: Laenukäenduse tingimused (Conditions for the loan guarantee) (kredex.ee)