Automatically approved SME loans for purchase of solar power plants and water heating systems

Loan type

Automatically approved SME loans for purchase of solar power plants and water heating systems

Purpose

Purchase of solar power plants and water heating systems

Clients

LLCs and individual entrepreneurs with at least 6-month business history

Exclusion list

1. Production or trade in any product or activity deemed illegal under the Republic of Armenia laws or regulations or international conventions and agreements
2. Production or trade in weapons and munitions
3. Gambling, casinos and equivalent enterprises
4. Trade in precious stones
5. Currency exchange office
6. Brokerage or bookmaking offices
7. Production, use of or trade in hazardous substances (like radioactive materials) other than pesticides and fertilizers used in agriculture

Creditworthiness assessment

Based on approved score card

Currency

AMD

USD

EUR

Minimum and maximum loan limit

AMD 1 million - 30 million or its equivalent in foreign currency
The loan can be disbursed in tranches where the share of each tranche is determined in accordance with the cooperation agreement with the vendor, provided that the share of the last tranche is at least 20% of the loan principal and is provided after insurance of the solar facilities.

Term (months)

84 (with an up to 6-month grace period)

Fixed interest rate in case of financing with cashback option

13%
(effective rate: 14.2-15%)

9%
(effective rate: 9.8-10.4%)

7%
(effective rate: 7.6-8.2%)

Fixed interest rate in case of financing out of internal resources

12%
(effective rate: 13.1-13.8%)

8%
(effective rate: 8.7-9.3%)

7%
(effective rate: 7.6-8.2%)

Fixed interest rate in case of financing for the energy efficiency (green technologies) and/or renewable energy purposes

9%
(effective rate: 9.8-10.4%)

N/a

N/a

Loan disbursement fee

1% of loan amount 

Loan cashing

N/a

Repayment

Annuity (equal monthly installments consisting of a portion of loan and a portion of interest)

Security

1. Pledge of cash flows through the account
2. Personal guarantee of the business founder/beneficial owner (for LLCs)
3. Pledge of the solar power plants and water heating systems being bought

Early repayment penalty

At least 5% of prepaid amount, chargeable if early repayment of the whole or part of loan is made during the first 3 years of loan term in case of loans provided for purchase of solar power plants and water heating systems
In case of loans in the amount of up to AMD 5 million or its equivalent in foreign currency, any early repayment fines, fees, increase of rates or any other means affecting the borrower’s condition are not applied.

Late payment fines and penalties

The interest rate specified in the loan agreement shall continue to be applied to overdue loans.
Fine in the amount of 0.13 % of overdue loan/interest for each day beyond terms

Down payment

5% min If the borrower and the vendor sign a buyback or debt waiver agreement, there is no down payment.

Insurance of property

In case of financing for purchase of solar power plants and water heating systems, if the insurance is obtained by the bank, the insurance related costs are included in the loan interest rate.  
Insurance shall be obtained within 10 days upon installation of the solar power plant/solar water heating system
                                                                                                                      

Dealing with the cashback in case of finance for purchase of solar power plants and water heating systems with a cashback option

If financing is provided for purchase of solar power plants and water heating systems with a cashback option, at least 60% of the amount refunded (taking into account applicable taxes) is used for the loan repayment. In such a case the early repayment fees are nor applied.  This requirement is not applicable if the buyer (borrower) has provided at least 10% downpayment.