Business loan terms
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Business loan terms

For businesses with over AMD 750M annual turnover

Business loan terms

For businesses with over AMD 750M annual turnover

Loans to large enterprises

A.1.1.

Secured by cash collateral, short-term treasury bonds, standard gold bars

A.1.2.

Secured by property and equipment, guarantees and warranties, other securities 

A.1.3.

Secured by cash flows, finished goods, raw materials or mixed collateral

Loans to small and medium enterprises (SMEs)

A.2.1.

Secured by cash collateral, short-term treasury bonds, standard gold bars

A.2.2.

Secured by property and equipment, guarantees and warranties, other securities

A.2.3.

Secured by cash flows, finished goods, raw materials or mixed collateral

 

Loan Amount

Over AMD or other currency equivalent of USD 1,500,000

Loan term

3-8 years

Grace period (for principal)

 up to 1 year

Annual interest rate*

For loans in AMD from 12 %

For loans in USD from 9 %

For loans in EUR from 8 %

For short-term loans in USD and EUR (for import or export purposes) from 8%

Annual interest rate for loans in other currencies is determined by the Management Board

posit (time or demand) + 4%, if the loan and the deposit are in the same currency % of deposit (time or demand) + 5%, if the loan and the deposit are in different currencies

Loan provision fee **

Loans with less than 1-year term: 0-0.5% of contractual loan amount 1-2 years: 0-0.7% of contractual loan amount 

More than 2 years: 0-1.5% of contractual loan amount 

Loans secured against cash collateral: 0%

Late payment fee***

Fine in the amount of 0.13% of overdue loan/interest for each day beyond terms 

Loan repayment

As per schedule or at the end of term (monthly, quarterly, semi-annually or otherwise as defined under loan agreement)

Early repayment

Early repayment fee in the amount of up to 6-month interest on repaid sums where envisaged under loan agreement

Loan security

 cash, T-bills, standard gold bars, bonds issued by Ameriabank, property and equipment, guarantees and warranties, other securities, cash flows, working assets or mixed collateral, real estate****

personal guarantees by the business founders/beneficial owners as additional security.

Loan-to-value (LTV)

ratio*****

Max 100%, if the currency of loan is the same as that of collateral or, if different, it is included in SDR basket, and max 95%, if the currency of loan is different from that of collateral, except for currencies included in SDR basket

a) Up to 80% of appraised value of collateral (in case of real estate) for loans with up to 96-month term; 90% if the debt service coverage ratio of the borrower is 1.5 or higher; up to 70% if the loan term exceeds 96 months

b) Up to 50 % of appraised value of collateral in case of movable property; 60% if the debt service coverage ratio of the borrower is 1.5 or higher and the loan term does not exceed 96 months up to 80% for the movable property which is going to be purchased or has been purchased during the last six
months, starting from the loan application submission date, where the loan term does not exceed 96 months

c) Up to 30 % of appraised value of collateral in case of inventories (finished goods, raw materials, etc.). Note that the share of this kind of collateral cannot exceed 40% of total pledge.

d) max 50% of average monthly bank account turnover for the most recent period from 6 (min) to 12 (max) months, for cash flows

e) for shares:
- up to 80% of appraised value of collateral in case of running business
- up to 60% of appraised value of collateral in case of business not yet running (project-based loansiv

Pledge insurance

To the extent of outstanding loan, on annual basis

- The insurance of the pledged real estate is to be obtained only if it is or will be used for business purposes.

Application handling period 

5-15 business days upon receipt of complete set of documents

Depending on the case, these terms may be extended for an additional period of not more than 10 business days.

Validity period (period during which loan approval is effective)

30 days, unless otherwise specified by the decision of the bank’s authorized body

Loan re-approval

Upon expiry of approval validity period, but not later than 60 days after the initial approval date

Form of disbursement

Wire transfer to bank account

Loan modification

application fee******

AMD  500 000 

[*] Maximum annual interest rate cannot exceed 24%. The overdue loans continue to bear the interest rate specified in the loan agreement.

[**] Whenever applied, the maximum annual rate or aggregate amount of fines and/or penalties under the agreement will be within the limits defined under the legislation of the Republic of Armenia.

[***] Where the guarantee is the main security and there are pledged items as well, loan-to-value ratio is not applicable. This being the case, the nature of security (main or additional) is defined in loan conclusion and approved by the authorized body.

[****] Where the project loans are concerned, if the project owner/contractor has implemented similar projects earlier, the LTV ratio is up to 80 percent of the appraised value of the collateral.

 

[*****] Loan modification fee is payable by the client in case the application for revision of the terms was submitted by the client at their initiative and approved by the bank. The fee is paid based on analysis and conclusion prepared by relevant department of the bank for the client’s application. Generally, in other cases of modification of the loan terms, charging of the fee is subject to decision of the bank’s authorized body.


Loan rates can be variable/floating, in which case supplementary agreements on variable component are executed:

Loans are issued in non-cash form in AMD or other currency, either lump sum or by tranches.


The following items may be considered as security:

  • cash, T-bills, standardized bullions of gold
  • fixed assets (immovable, movable), guarantees and warranties
  • cash flows, working assets or mixed collateral


Collateral Appraisal 

Fixed assets should be appraised by an independent company cooperating with the bank, subject to the company’s tariffs. Appraisal costs will be borne by the borrower. Appraisal costs vary within AMD 13,000-30,000 depending on the property type. Appraisal fee for the large property will be quoted on a case-by-case basis (negotiable).


Collateral Registration

  • All collateral registration costs (notarization, registration at the relevant branch of State Committee of the Real Estate Cadaster) will be borne by the borrower.
  • Legal (notary) fee: AMD 14,000-16,000 (lump sum), if the loan is secured by a vehicle
  • Legal (notary) fee: AMD 13,000-20,000 (lump sum), if the loan is secured by real estate
  • Fee for statement from the cadaster on the real estate encumbrance: AMD 10,000
  • Security interest filing fee (for real estate): AMD 26,000
  • Armenian Police fee (lien and security interest in movable property): AMD 5,000 (lump sum).

Collateral insurance 

To the extent of the principal/outstanding loan, on annual basis. The collateral shall be insured by independent insurance companies cooperating with the bank. The following items are subject to insurance: real estate, except for land, movable property, inventories, such as finished goods, raw materials, etc. (upon request). Insurance costs shall be defrayed by the borrower.


When applying for a loan, make an informed decision

Last updated on 29.11.2019, 10:11