CAP SP 2023–2027 funding instrument loans for rural entrepreneurs

The Common Agricultural Policy Strategic Plan 2023–2027 funding instrument provides loans through the Rural Development Foundation for investments in agricultural production and processing, food industry, agricultural cooperation, and rural entrepreneurship. The funding instrument targets economically sustainable projects that cannot secure sufficient financing from the market due to reasons such as insufficient collateral, small company size, location, or investment risk. This is a repayable loan, not a non-repayable grant.

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Agency	PRIA
Region	EU
Country	EE
Legal form	Company
Start date	12 Jan 2026
Max funding	Growth loan for micro and small enterprises: 5,000–200,000 euros., Long-term investment loan: 200,000–1,000,000 euros., For a recognized producer organization or a company under its dominant influence, the long-term investment loan amount can be up to 3,000,000 euros., Working capital loan: 5,000–200,000 euros, but not more than 50% of the company's average total turnover in the last three completed financial years., A loan can be applied for repeatedly, but the balance of the existing loan and the new loan amount together may not exceed the maximum limit of the respective loan product.
Budget	The total volume of the target fund of the funding instrument is 55,000,000 euros, of which 3,850,000 euros are intended for management fees. The European Agricultural Fund for Rural Development’s share is 33,000,000 euros and the Estonian state budget's participation is 22,000,000 euros. The target volume for growth loans for micro and small enterprises is 20,000,000 euros. The target volume for long-term investment loans is 30,000,000 euros. The target volume for working capital loans is 5,000,000 euros.
Coverage	MES may provide a growth loan independently or in cooperation with a credit or financial institution. Long-term investment loans are provided only together with a credit or financial institution. The bank or other financial institution must provide at least 30% of the total sum of the loans from MES and the financial institution. The loan may cover the own contribution part not covered by an investment grant, but it may not be used for pre-financing the grant. The total amount of the loan and grant provided for the same cost item must not exceed the actual cost or the maximum grant rate for the respective support measure. The interest rate consists of the reference rate valid at the time set by the European Commission and a margin determined on the basis of the company's credit rating and collateral.

Grant application conditions

Applicant registration	The applicant must be entered in the Estonian commercial register.
Applicant's field of activity	Producer of agricultural products, including young or starting agricultural producer. Cooperative connecting agricultural producers. Cooperative active in agriculture, recognized producer organization, their union, or an enterprise under their dominant influence. Economically sustainable food producer, except for enterprises engaged in processing or preserving fish, crustaceans, and molluscs. Rural entrepreneur whose permanent operational site related to the project is in a rural area that meets the requirements.
Target group for growth loan	The growth loan can be applied for by a micro or small enterprise that complies with the EU SME definition.
Growth loan amount and period	The loan amount is 5,000–200,000 euros. The loan period is up to 15 years. The grace period can be up to five years in total, but not more than three consecutive years. The loan is disbursed in one lump sum or in installments within one year from signing the loan agreement.
Collateral for growth loan	If MES grants the loan independently, the expected outcome of the collateral realization must cover at least 50% of the loan amount. In joint lending, the MES loan collateral must at least meet the small collateral level according to the European Commission's methodology. Main collateral may be a mortgage, commercial pledge, register pledge, or company guarantee. Additional collateral may be a surety of a board member, owner, or association member up to 50,000 euros.
Target group for long-term investment loan	A small or medium-sized company can apply for the loan. In interventions in agriculture, food industry, and cooperation, a large enterprise can also be an applicant. In the 8.1 intervention to improve the competitiveness of rural enterprises, the applicant must be an SME. A recognized producer organization or a company under its dominant influence can apply for the loan.
Long-term investment loan amount and period	The loan amount for an ordinary enterprise is 200,000–1,000,000 euros. The loan amount for a recognized producer organization or a company under its dominant influence can be 200,000–3,000,000 euros. The loan period is 1–25 years. The grace period can be up to ten years.
Co-financing of long-term investment loan	The loan is provided only together with a credit or financial institution for the same investment. The credit or financial institution's loan must comprise at least 30% of the total investment loan obligations. Before the MES decision, the financial institution must make a loan decision specifying the loan amount, term, and possible interest rate.
Target group for working capital loan	The applicant must be a micro or small enterprise. The applicant must operate in agricultural production, compliant food production, or agricultural cooperation. The working capital must be related to activities of the relevant CAP SP intervention or contribute to the specific objective of the CAP SP.
Working capital loan amount and period	The loan amount is 5,000–200,000 euros. The loan amount must not exceed 50% of the company's average total turnover in the last three completed financial years. The loan period is up to three years and the grace period is up to one year. The loan period may be extended by up to two years, one year at a time. With extensions, the period can be up to five years.
Purpose of working capital loan	The working capital loan is not a general purpose loan to cover an enterprise’s ordinary cash flow shortages. The applicant must clearly describe how the working capital is linked to the investment, production development, or CAP Strategic Plan objectives.
Financed CAP SP intervention	A2.3 – productive investments in tangible and intangible assets in the food industry. A2.6 – productive tangible and intangible investments by agricultural producers. A3.1.2 – cooperative investments in tangible and intangible fixed assets. A8.1 – investments to improve company competitiveness in rural areas.
Location of investment	The investment object must be located in the territory of Estonia. For intervention A8.1, the permanent operational site related to the project and the investment object must be located in a rural or small town area as defined by the Statistics Estonia methodology. For intervention A8.1, investments located in Harku, Saue, Saku, Kiili, Rae, Jõelähtme, and Viimsi municipalities are not eligible.
Economic sustainability	The entrepreneur must be economically sustainable and solvent. The entrepreneur must not be a company in difficulty as defined by EU state aid rules. The entrepreneur's equity must comply with Commercial Code requirements. The entrepreneur’s loan servicing ability must be sufficient throughout the loan period.
Financial ratios	For growth and working capital loans, the share of equity before loan disbursement must be at least 15% and at least 10% after loan disbursement. This requirement does not apply to sole proprietors. The debt service coverage ratio (DSCR) must be at least 1.1 according to a conservative estimate. The total debt to EBITDA ratio can be up to 8. The total debt to EBITDA ratio requirement does not apply to primary agricultural producers or start-up enterprises.
Tax arrears and other debt obligations	The entrepreneur must not have any state tax arrears, or the payment of tax arrears must be deferred. The entrepreneur must not have overdue debt obligations to MES, credit or financial institutions, or other persons that may indicate financial difficulties. The entrepreneur, its owners, or related companies must not have been in arrears to MES for at least 60 days in the past 12 months, except for temporary and clearly justified arrears.
Reliability of directors and owners	Members of the management body and owners of the entrepreneur must be reliable and competent. They or associated companies must not have intentionally caused material damage to MES or to funds managed by MES. Companies and persons having dominant influence over companies engaged in the production, processing, marketing, or sale of agricultural products must not have a valid conviction for grant misappropriation or environmental offences referred to in the terms.
Interest rate	The interest rate is based on the base rate set by the European Commission at the time of signing the loan agreement and the margin determined by MES. As of 1 July 2026, the European Commission's base rate is 2.71%. The margin depends on the entrepreneur's credit rating and the collateral offered. The base rate is fixed on the date of signing the loan agreement and does not change during the contract period.
Subsidized interest rate	The interest rate may be reduced to a level not lower than the European Commission's base rate plus 2%, if the investment creates a job with a salary higher than the Estonian average, uses innovative or energy-efficient technology, relates to the circular economy, or if the property collateral covers at least 100% of the loan amount. For growth loans, the interest rate for a young agricultural producer, recognized producer organization, company under its dominant influence, or a start-up company operating for up to 36 months may be reduced to a level not lower than the base rate plus 1%. For long-term investment loans, the minimum margin added to the base rate may be 1% for a young agricultural producer, recognized producer organization, or company under its dominant influence. An interest rate lower than market conditions may constitute state aid.
State aid requirements	If state aid applies, the entrepreneur must comply with applicable EU state aid and de minimis rules. The subsidy element in the loan interest may reduce the entrepreneur's remaining de minimis aid ceiling. When combining the loan and other support, the allowable state aid ceiling and double funding of the same cost must be avoided.
Loan agreement fees	There is no fee for signing the loan agreement. There is no fee for the first amendment of the loan agreement. If the contract is amended more than once a year, MES may charge a fee of up to 1% of the outstanding loan balance.
Documentation	https://www.pria.ee/toetused/rahastamisvahend-upp-sk-2023-2027

Eligible expenses

Evaluation criteria

Business exclusions

Reporting

Application process

Application requirements