Business Loan

USEFUL INFORMATION

General Information

• Mutual relations between the bank and the borrower will be regulated under the loan agreement, in line with RA legislative acts.
• Loan term and interest rates, maximum and minimum amounts, conditions and principles of advancing loans are set in the bank's Lending Policy and other internal guidelines regulating lending procedure.
• In the event of involvement in the lending process under a specific lending program, we will extend loan funds according to the terms and conditions of that specific Program: interest rates, loan amounts, repayment term, loan-to-value ratio, etc. (lending terms and conditions under a Program are not subject to regulation by the bank's Lending Policy).

Acceptable Ratio of Loan-to-Value per Type of Collateral

• Real property and other fixed assets – up to 70% of the appraised market value,
• Treasury bills – up to 95% of the nominal value,
• Other securities – up to 70% of appraised value,
• Standard gold bars and scrap of precious metals – up to 95% of appraised value,
• Precious and semi-precious stones – up to 50% of appraised value,
• Cash (in deposit and current accounts) – up to 90%,
• Working assets – up to 50% of appraised value,
• Loans backed by cash flows will be advanced to those who have been our customers for a period of over one year and executed up to 30% of annual cash flows through the current account (loans maturing within a 180-day period).

Timeline for Decision-Making and Extending a Loan

• The decision will be made within 10 (Ten) banking days upon submission of necessary documents.
• We will notify you on the decision within 1 (One) banking day orally or, at your request, also in writing.
• Loan will be advanced to you within 5 (Five) banking days upon completion of pledging process (when the entire package of documents is ready).

Criteria for Taking Decisions on Loan Application

Criteria for Positive Decision-Making:

• Your adequate creditworthiness according to assessment criteria set in bank's internal guidelines,
• Trustworthy data and documents submitted to the bank,
• Positive rating of your commitment and due diligence according to the outcomes of the credit history review and analysis,
• Liquid collateral according to the criteria set by bank's internal guidelines as well as acceptable ratio of Loan-to-Value,
• Well-validated purpose of the loan and business-plans.

Criteria for declining a Loan Application:

• Your inadequate creditworthiness according to assessment criteria set in bank's internal guidelines for assessment of borrowers' creditworthiness,
• Unreliable data and documents submitted to the bank,
• Negative rating of your commitment and due diligence according to the outcomes of the credit history review and analysis,
• Badly justified purposes of the loan and unsupported incomes projected in business plans,
• Other valid reasons which can affect the ability of the borrower to repay the loan.

Procedures of the loan repayment, interest accrual and payment

• The loan will be repaid according to the schedule under one of the following schemes, whichever you prefer:
  • “Annuity” plan (equal monthly payments), including variable portions of the principal amount and accrued interest,
  • “Springy” plan (variable monthly payments), including the payment of fixed principal amounts and variable interest.
• Interest will be accrued on the actual loan balance covering the period of loan disbursement till the day before the due date (no interest will be accrued for the due date).
• Interest calculation is based on a 365-day year. If the due date is not a business day, this date will be extended to the next business day.
• Payment can be made in our Head office and all branches (except Erebuni branch).

Extending Lines of Credit

Lines of credit are intended for RA resident and non-resident legal entities and sole proprietors at business loan interest rates, loans will be disbursed in Armenian drams or foreign currency. The following lines of credit are available to relevant borrowers:

• Revolving line of credit, under which you can periodically repay the debt within the limits and term of validity of the approved line of credit and borrow funds within the set limits. It is noteworthy that an annual interest rate at 0-4% will be accrued on the unused portion of the line of credit.
• Non-revolving line of credit, funds will be extended to a borrower in several portions, upon the debt repayment the line of credit limit will not be renewed; besides, no interest will be accrued on the unused portion of the line of credit.

Early Repayment Terms

In case of repayment of more than 50% of the principal amount prior to expiration of the first half of the loan term, the borrower shall pay а penalty at 5% of the prematurely paid sum exceeding the 50% of the principal amount.

WARNING:

• In case of delinquent liabilities with regard to the loan principal and interests of the pledged property can be CONFISCATED according to the law, and the information about the borrower will be recorded in the Credit register.
• In case of redeeming the obligations as a result of delinquent liabilities on account of the collateral, if the value of the collateral is not enough for covering the borrower's loan obligations, then the Bank (according to the existing legislation) has an opportunity to redeem the loan obligations on account of the borrower's other properties ( if available).