What funds can be used to get a preferential loan?
Although a company that plans and expands the rehabilitation process does not receive a loan, it has to develop a business plan at a certain time and, in many cases, raise loans, regardless of whether it has the money or not.
It is necessary to raise funds for the purchase of equipment and construction without prejudice to working capital. Credit should lead to development. If a company applies to any bank, at best it can attract business loans at 15-24 percent. These loans, originated from the internal resources of banks, usually do not have a grace period.
State support funds for the development of entrepreneurship are allocated on preferential terms for business development in Azerbaijan.
What are these Funds:
Entrepreneurship Development Fund (EDF), Investment Promotion Fund, State Fund for the Development of Information Technologies, Agency for Agrarian Credit and Development (AACD)
Benefits of a loan from the Enterprise Development Fund
The Entrepreneurship Development Fund is the fund with the largest financial resources, credit resources and portfolio in the country. The Entrepreneurship Development Fund provides soft loans for business projects with a service life of 3-10 years in manufacturing, processing and other specific areas with an annual payment of 5 percent and a grace period of 18-60 months.
Remember that the Entrepreneurship Development Fund does not provide concessional loans to enterprises in the service and trade sectors. The loan is issued through banks.
Investment promotion benefits
Investment promotion stimulates economic development. True, this Fund does not lend, but gives big discounts for companies and entrepreneurs. In addition, a project that stimulates investments, being exempted from paying state duties (at least 15%) and VAT (18%) at the Customs, and from property and land taxes when carrying out internal activities, acquires the right to a 7-year grace period. The right to reward applies only to new equipment and technology imported from foreign countries.
Eligibility for Mortgage and Guarantee Fund Loans
The Mortgage and Guarantee Fund provides state-guaranteed subsidized loans to projects with an annual repayment fee of less than 5 million manats and for a period of up to 5 years with an annual payment of 7-9%. However, the Fund also provides concessional soft loans to service and trade enterprises. In this case, a grace period of 1-2 years is determined only upon receipt of fixed assets. Projects aimed at replenishing working capital and purchasing commercial goods do not have a grace period.
Note: 10 percent of the minimum amount of 10 percent established by the state for each region and sector of the economy must be paid through a bank or confirmed on the basis of an audit certificate. Otherwise, the project investments (investments) will not be accepted for execution for reward.
These funds usually provide concessional and subsidized loans to operating companies. However, business plans must be designed to meet the minimum requirements so that they can be accepted and reviewed. However, each fund has minimum requirements and a standard for drawing up a business plan.