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Short-term Loans
Short-term loans are intended for a short-term increase of the working capital (e.g. for the purchase of new goods, acquisition of fixed assets or real estate).
The loans can be obtained in EUR, LVL or USD with a term from 3 months up to 3 years.
The minimum loan amount:
- For corporate customers, residents of Latvia: EUR 200 000 (or the equivalent in LVL, USD).
- For corporate customers, non-residents of Latvia: EUR 1 000 000 (or the equivalent in USD).
Real estate, manufacturing equipment and other fixed assets as well as inventory and receivables may serve as a collateral.
Maximum amount of financing depending on the collateral type:| Collateral type | Amount of financing |
| Real estate * | 70% of market value |
| Land * ** *** | 50% of market value |
| Manufacturing equipment and machinery | 60% |
| Other fixed assets | 50% |
| Trade inventory | 50% |
| Accounts receivable | 50% |
No more than 90% of the liquidation price.
** If land (territory) is being used as: a territory for building a residential real estate property, a territory for mixed purpose property, a territory for industrial and manufacturing buildings, a territory for building commercial centers and complexes.
*** If the borrower's income is sufficient to repay the loan and the sale of the collateral is not the only source of the loan repayment.
If real estate is pledged as collateral, it is necessary to make an appraisal of its value. Rietumu Bank offers its customers appraisal services of the following real estate agencies: Latio, Nira Fonds, Arco Real Estate, Eiroeksperts, Colliers International, etc.
The Bank can disburse the loan in parts in accordance with the project implementation schedule alongside with the principal repayment grace. For example, the Bank can provide the customer with a principal grace for the period of project implementation, construction, equipment start-up, etc.
Interest rates
Short-term loans are extended both with a fixed and flexible interest rate, formed from the flexible part (London Interbank Offered Rate, i.e. LIBOR, or the Riga Interbank Offered Rate RIGIBOR) and the fixed part.
Flexible rate for loans in EUR is calculated starting from 3M LIBOR EUR + 4%, for loans in USD – from 3M LIBOR USD + 4% p.a., for loans in LVL – from 3M RIGIBOR + 4% p.a.
At the same time, the Bank reserves the right to set the minimum level for the loans with the flexible interest rate. Presently, the minimum cumulative level of the rate applied to loans can be starting from 7% p.a.
Fixed interest rate for loans is calculated starting from 8% p.a. Maximum fixed rate for loans in EUR and USD equals 12% p.a.
Fixed and flexible interest rates depend on the risk level of the particular project, financial status of the company, collateral liquidity and other factors.
Specified loan interest rates refer to loans for Latvian residents. Lending terms for Latvian non-residents are considered on individual basis.
Documents required for the loan request:
- Certificate of Incorporation;
- Articles of Association with all registered amendments and alterations;
- A reference from the Enterprise Register, confirming the signatory power of the company’s representative(s);
- The passport of the person having the signatory power;
- Tax Clearance Certificate;
- Annual Report (full version) for the previous two years with a stamp of State Revenue Service;
- Balance Sheet and Profit & Loss Statement for the current year with Balance Sheet breakdown including receivables, savings, fixed assets, liabilities);
- VAT declaration for the previous two tax years and for the last month with stamp of State Revenue Service;a
- Documents confirming property rights of the pledged property (title deed);
- Collateral appraisal issued by a certified appraiser;
- Business plan;
- Cash flow forecast for the loan period.
