For Estonian companies, expanding into foreign markets is often associated with significant financial challenges. The Entrepreneurship and Innovation Foundation (EIF) offers an export loan, which is designed to finance export transactions for goods produced in Estonia. It allows exporters to offer foreign buyers long-term payment terms, while receiving up to 95% of the sales transaction money immediately upon delivery of the goods or services. The minimum payment term starts from two years and can reach up to ten years, with the loan amount being up to 15 million euros per buyer.

An export loan is aimed at companies operating in Estonia that produce capital-intensive durable goods or provide long-term services and sell them directly to end customers in a foreign country. This means that an export loan is not suitable for companies that sell their products through resellers or intermediaries.

Using an export loan gives companies the opportunity to offer buyers a purchase financing solution in addition to the sale of goods or services. This can be a decisive factor in concluding a transaction, as it allows the seller to receive money immediately, while the foreign buyer pays according to a schedule, at least two payments per year. In addition, an export loan can also finance the seller's own production period costs, whereby when financing the production period, the seller pays only the agreed export loan interest until the goods are delivered.

An export loan is accompanied by mandatory credit insurance, which allows you to verify the creditworthiness of the foreign partner already during the transaction. In the event of the realization of possible insured risks, for example, if the buyer becomes insolvent even when the goods being produced have not yet been delivered, this provides the opportunity to receive insurance compensation of up to 95% of the value of the export transaction or the amount of production costs incurred. An export loan can also finance the insurance premium for mandatory credit insurance and include it in the value of the export transaction.

Several Estonian companies have already expanded their operations and entered foreign markets with the help of export loans. For example, Procon OÜ, which offers complete solutions for energy production and use, used EIS export loans and credit insurance to implement a project worth approximately 2 million euros. Margus Arvisto, a member of the Procon board, said: "EIS export loans and credit insurance played a key role in the development of our company, enabling us to implement a project worth approximately 2 million euros, which we would not have been able to implement without their support. The loan covered our production costs and kept cash flows in balance, ensuring the successful implementation of the project."

The export loan has also helped AS Hekotek, the largest mechanical engineering company in the Baltics, to achieve a deal where one of the customer's criteria for selecting a supplier was the supplier's ability to offer a payment period of several years for the purchase of the purchased goods. Rain Nuka, CFO and member of the board of Hekotek, noted: "The EIS export loan and the credit insurance issued to secure it enabled us to achieve a transaction where one of the criteria for the customer's selection of a supplier was the supplier's ability to offer a payment period of several years for the purchase of the purchased goods. Based on our own resources, we as a supplier were not able to offer this to the customer. EIS gratefully came to support us as a financial partner in this transaction, allowing us to compete on an equal footing with our competitors, taking into account the customer's wishes."

If your company is planning to expand into foreign markets and needs financing for this, it is worth considering the possibilities of an export loan.