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COVID-19 EU PolicyWatch

Database of national-level responses

Eurofound's COVID-19 EU PolicyWatch collates information on the responses of government and social partners to the crisis, as well as gathering examples of company practices aimed at mitigating the social and economic impacts.

Factsheet for case EE-2020-13/347 Updated – measures in Estonia

Emergency loan and loan guarantee

Erakorraline laen ja laenukäendus

Country Estonia , applies nationwide
Time period Temporary, 27 March 2020 – 31 December 2020
Type Legislations or other statutory regulations
Category Supporting businesses to stay afloat
– Access to finance
Author Ingel Kadarik (Praxis Center for Policy Studies) and Eurofound
Case created 07 April 2020 (updated 06 January 2021)

Background information

Due to the outbreak, several companies are in a difficult position financially to continue providing their services/products, to pay their loans or to start a new business (for example, opportunities created by the corona outbreak). For this purpose, the state provides additional funds to Kredex (a state founded foundation) and Rural Development Fund to provide support measures to companies in a form of loans and loan guarantees. On a smaller scale, those measures are already available and relevant instructions for the applicants and terms and conditions of the measures have been approved by the Kredex at the end of March 2020, but additional government finances are needed for the full provision of these measures. For this, the supplementary state budget was approved by the Parliament on 15 April 2020.

Content of measure

Kredex, the Credit and Export Guarantee Fund (state founded foundation), provides loans and loan guarantees to companies. To relieve the impacts of the COVID-19, KredEx offers additional loan guarantees and loans:

  1. emergency loan guarantee for issuing new loans and to relax the repayment schedules of existing bank loans,
  2. emergency loan for companies who have been turned down by banks.

The guarantee enables a company to secure the obligations of an enterprise, arising from loan, leasing and guarantee contracts.

Requirements to be eligible:

  • According to the financial projections presented, the company is sustainable and solvent in the long term.
  • The company was not in difficulty as of 31 December 2019.
  • The company has no overdue debts which have incurred before 1st January 2020.
  • No bankruptcy or liquidation proceedings have been initiated against the company.

General conditions:

  • The sum of outstanding amounts of loans or loan guarantee of Kredex cannot exceed €5 million per company.
  • The total amount of emergency loans from Kredex and loans with emergency guarantee by Kredex cannot exceed double the salary cost of the company for 2019 with social tax. Exceptions are available: the maximum guaranteed obligation could be up to 25% of the company's turnover in 2019 or to a justified 18-month liquidity requirement for a SME or to a justified 12-month liquidity requirement for a large company).

Specific conditions by type:

  • New loans, guarantee: Up to 90% of the guaranteed loan or lease (60% in case of a construction or retail/wholesale trade sector company)
  • Existing loans, fixed guarantee: Up to 35% of the loan and lease to be secured, but no more than the sum of the payments of the principal amount of the loan or lease which will remain accessible to the company until 31 December 2021.
  • Existing loans, proportional guarantee: Up to 50% of the loan and lease to be secured.
  • Extraordinary loan by Kredex: the amount is up to €5 million. The interest rate is from 4% per annum in case the loan is at least 50% collateralised, and 6% per annum in case of only owner-guaranteed loan.

The validity period of the guarantee is 72 months; the loan period is 6-72 months. The guarantee can be issued and amended until 31 December 2020.

For agriculture, fishing and food industry companies, similar measures are provided by the Rural Development Fund . The total amount of the funding is €200 million.

The maximum loan amount for single-applicants is up to €1 million, if the loan is taken together with a credit or financing institution, the maximum amount is €2 million. The interest rate is from 2% and fixed for 2 months. The loan period is up to six years, in case of investment loans - ten years. At least 30% of the loan must be guaranteed (e.g. real estate, surety or other). Loan applications are accepted until 23 December 2020.

In case of loan guarantee, similar to Kredex measure, the total amount of the loan to be guaranteed cannot exceed double the salary cost of the company for 2019 with social tax, 25% of the company's turnover in 2019 or a justified 18-month liquidity requirement for an SME or a justified 12-month liquidity requirement for a large company. Up to €5 million is guaranteed, but not more than 90% of a proportionally guaranteed loan or 35% of a fixed guaranteed loan. The length of the guarantee is up to six years.


The following updates to this measure have been made after it came into effect.

30 December 2020

As the budget was exhausted, the Rural Development Fund did not accept loan applications anymore as of 23 October 2020.

Use of measure

Kredex: data available here

By 14 December 2020, 139 companies received a loan in the total amount of €220.1 million (the largest sum was €100 million per one company). 293 companies' loans were guaranteed in the total sum of €58.6 million.

Rural Development Fund: data available here

By 23 December 2020, 146 applications for guarantees in the amount of €48.4 million and 372 applications for loans in the amount of €157 million were received. 133 guarantee (€40.2 million) and 303 loan (€84.4 million) decision were made and altogether 375 contracts were signed (total amount €101.7 million).

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
Public support service providers
National funds

Social partners

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

Trade unions Employers' organisations
Role No involvement as case not in social partner domain Consulted
Form Not applicable Any other form of consultation, institutionalised (as stable working groups or committees) or informal

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

  • No involvement
  • Main level of involvement: Peak or cross-sectoral level


In addition to the sectoral business association, the Estonian Employers Confederation was consulted during the design of the measure. The possibility to give feedback was open to all interested parties. Trade unions did not participate in the consultation process due to the nature of the measure.

Views and reactions

Peak-level employers organisation and sectoral business organisations have been partially in agreement with the measure, stating that while overall the measure is necessary, numerous restrictions of the measure hinder the accessibility of the measure.


  • 27 March 2020: Extraordinary fixed guarantee conditions for existing loans (
  • 27 March 2020: Extraordinary proportional guarantee conditions for existing loans (
  • 27 March 2020: Extraordinary proportional guarantee conditions for new loans (
  • 27 March 2020: Conditions of the extraordinary loan (
  • 15 May 2020: Rural Development Fund loan guarantee conditions (


Eurofound (2020), Emergency loan and loan guarantee, case EE-2020-13/347 (measures in Estonia), COVID-19 EU PolicyWatch, Dublin,

Disclaimer: This information has not been subject to the full Eurofound evaluation, editorial and publication process. All information is preliminary and subject to change.