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Contract/Purchase Order Finance
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Loan type
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Contract/Purchase Order Finance
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Purpose
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Financing is purely transaction-driven and may be used for funding of specific orders under the contracts.
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Clients
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Legal entities or individual entrepreneurs having at least 1-year experience in the industry of financed contract/purchase order
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Exclusion list
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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 See exclusion list here.
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Creditworthiness assessment*
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According to the approved criteria
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Loan conditions
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Currency
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AMD
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USD
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EUR
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Minimum and maximum loan limit
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Up to 75% of PO, AMD 1,000,000 - 30,000,000
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Term (months)
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45-180 days or the term stipulated in the contract + max 15 days, whichever is less
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Annual interest rate
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16%
(effective rate: 18.6-20.8%)
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13%
(effective rate: 15.1-17.2%)
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11.5%
(effective rate: 13.4-15.5%)
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If the loan is secured by cash or bonds issued by Ameriabank, the interest rate is:
- Applicable interest rate for cash/bond + 4%, but in any case not more than the rates specified above, if the loan and the collateral are in the same currency
- Rates specified above, if the loan and the collateral are in different currencies
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Where the client wishes that insurance of property should be obtained by the bank, the rate of interest is increased by:
• 2.5% if the pledge is vehicle, or
• 0.5% if the pledge is plant and equipment.
- In case of financing for purchase of solar power plants and water heating systems, the insurance related costs are included in the loan interest rate.
Where the insurance of real estate is obtained by the client, the interest rate is reduced by 0.05%, based on the share of each type of assets in the total collateral.
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If loan-to-value ratio differs from approved standard, the applicable interest rate is increased by 0.5%.
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Depending on credit history, the applicable interest rate can be increased by 0.5%.
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Loan disbursement fee
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0.5% of the loan amount
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Terms of PO / contract finance
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1. Financing is backed with order-related invoices and the like. Financing is disbursement-based.
2. Any payments for raw commodities etc., services & inventories necessary for performance of order, as well as for honoring of salaries, tax liabilities and other order-related commitments shall be made in non-cash form.
3. Insurance of goods (cargo) acquired for order execution
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Loan cashing
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N/a
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Loan modification application fee
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AMD 500,000
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Repayment
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Any amount received under the executed contract shall be used for loan repayment.
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Security
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Eligible security
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1. Working assets
2. Account cash flows and account balance
3. A/R and other rights deriving from the given contract
4. A/R and other rights deriving from other contracts
5. Guarantee of the owners
6. Bank guarantee
7. L/C issued in favor of the client upon the buyer's request
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For financing of over 75% of the contract price, pledge of assets is required. Financing may be secured by the real estate, vehicles, plant and equipment, satisfactory to the Bank, metal accounts in gold, cash, bonds issued by Ameriabank.
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LTV ratio for financing of 75% -100% of the PO (based on the liquidation value)
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The value of the security is included in the estimation of the LTV ratio for the loan portion above 75% of the contract price, in an amount not more than:
1. Up to 100% if the loan is secured by real estate¹
2. 50% if the loan is secured by a vehicle
3. 40% if the loan is secured by property, plant and equipment and working assets but not more than 30% of the value of aggregate pledge
4. 80% if the loan is secured by metal accounts in gold with Ameriabank:
5. If the loan is secured by cash/bonds issued by Ameriabank:
-90% if currency of the collateral is the same as of the loan
-70% if currencies of the collateral and the loan are different
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Age of vehicles to be pledged
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Max 12 years for foreign brand vehicles other than vehicles made in Russia, China and Iran, in which case max age is 8 years
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Required additional security
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Personal guarantees by founders/beneficial owners of business
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Additional security
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The Bank may request pledge of assets if financing up to 75% of the contract price in which case LTV ratio is not defined.
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Insurance of pledged property
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Insurance of property
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The insurance of the pledged real estate is to be obtained only if it is or will be used for business purposes.
The insurance of real estate, vehicles and plant and equipment is maintained throughout the loan term:
1. If by the Client: at least for the amount of the outstanding principal/credit limit
2. If obtained by the bank: to the extent of the outstanding principal/credit limit.
• In case of financing for purchase of solar power plants and water heating systems, the insurance should be obtained within 10 days upon installation of power plants/water heating systems.
The following vehicles are not subject to insurance:
• Vehicles transporting hazardous materials (toxic substances, chemicals, radioactive and explosive materials)
• Vehicles to be used in races, test drives; vehicles which have three wheels, snow removers, motorcycles, special purpose vehicles
• Taxis and rental cars
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Loan service fees**
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Modification of the loan terms
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AMD 25,000
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Substitution of pledged property (for real estate; including change of the property owner)
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AMD 20,000
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Substitution of pledged property (for vehicles; including change of the owner of the pledged vehicles)
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AMD 10,000
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Provision of pledge-related consents, permissions and references
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AMD 10,000 (VAT included)
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Change of the loan repayment date
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AMD 10,000
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Other fees payable by client
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1. Fee for the unified statement from the State Committee of the Real Estate Cadaster adjunct to the RA Government; fee for police reference on vehicles encumbrance
2. Notary fee for registration of pledged real estate; fee for state registration of the bank’s security interest under the real estate pledge agreement; Fee for the certificate of registration of the security interest in the vehicle
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Early repayment
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N/a
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Late payment fines and penalties
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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
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*There may be deviations from the benchmark indicator based on the financed business's specifics, if the business is profitable but no own resources are required due to the business specifics.
No creditworthiness ratios are calculated and no business analysis and proof of income are required for loans secured by cash and metal accounts in gold.
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**The fee is charged if the modification is requested by client. Where there are several applicable fees for the same modification, the highest fee is charged and only once. Fees are not applicable in case of loans secured by cash, bonds and metal accounts. If the modification implies adding new pledge or involving a new guarantor, no fee is charged Your financial database»՝www.fininfօ.am ATTENTION! “YOUR FINANCIAL DATABASE” IS AN ELECTRONIC SYSTEM AIMED AT FACILITATING SEARCHING AND COMPARISON OF THE SERVICES OFFERED TO INDIVIDUALS AND MAKING THE CHOICE EASIER FOR YOU. ATTENTION: THE NOMINAL INTEREST RATE OF THIS LOAN MAY BE CHANGED BY THE FINANCIAL ORGANIZATION. Your electronic method is the most convenient way to receive information. It is available 24/7, as well as the risks of information loss և ensure privacy.
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