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Export financing - Loan for the investments of Czech firms abroad
Description of the Loan for the investments of Czech firms abroad:
To finance investment projects abroad, a loan provided in relation to the investments of Czech corporate bodies abroad can be used; this is a medium-term or long-term loan (with a maturity of more than 3 years), which is provided to a foreign company controlled by a Czech company, for investments abroad (or in some cases directly to the Czech firm).
EGAP has also set up a type of insurance for short-term loans for investments abroad with a maturity period of less than 2 years.
EGAP "If" Insurance of a loan for financing an investment abroad covers commercial and territorial (political) risks of the non payment of the loan by the debtor (or investor), resulting from the receivable of the debtor - the foreign company.
The subject of the insurance is the KB receivables of the debtor from the provided loan for investments, including interest and fees.
Basic description of the Loan:
- A medium-term or long-term loan for 80% of the value of the investment with a maturity period of more than 3 years or a short-term loan with a maturity period of less than 2 years (from the commissioning of the investment)
- 20% financing from the investor's own sources
- The recipient of the loan is a foreign company; the recipient of the loan can also be the investor
- The investor controls the foreign company, i.e. has 51% of the registered capital, if it has 50 % or less of the registered capital, it must have the majority vote in the top management of the company (a majority on the management bodies or on the statutory bodies or the supervisory board)
- The subject of the financing is:
- The acquisition of a new investment by the investor
- The acquisition of long-term tangible, intangible or financial assets of the foreign company
- The expansion of the inventories of the foreign company
- Operating finance for the foreign company for a previously agreed and inspected purpose with secured return of the loan
- To expand or modernise an existing investment
- The investment of sufficient long-term investment capital
- The profits of the investor depend on the performance of the foreign company and on the revenues from the investment
- For a part of the investment financed from other sources than the investment loan, the investor must conclude "I" EGAP insurance against the risks of the revenues from investment being prevented from being transferred, confiscation or politically motivated forced damage.
Advantages of a Loan for investments of Czech firms abroad:
- The loan enables Czech investors participating in tenders abroad to submit a financing proposal, which is often required, together with the technical proposal; the bank prepares the proposal of the terms under which it will provide the financing
- Help when choosing a foreign partner based on analyses of the parties participating in the project
- In the case of default because of political risks, EGAP compensates the bank without the co-participation of the investor
How to obtain a Loan for investments of Czech firms abroad?
If you want to know more information about this product or to order it directly please contact your bank advisor or call free Info line KB 800 111 055.
