| SME Finance Guarantees |
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Banks and financial institutions are requesting guarantees to extend credit and loan financings.
· Loan guarantees for medium to long term loans
· Export credit guarantees
Loan guarantee for medium to long term loans How can the Loan Guarantee Scheme assist you in raising a term loan? The JSMP LGS will guarantee the lending bank against the risk of repayment default for an amount which is up to 70% of the outstanding loan capital with a ceiling of Eur75,000 (or equivalent in JD). This guarantee will facilitate the banks’ approval of the loan. Who can benefit of JSMP LGS?
- Be an existing or start-up legal entity and - Be established in Jordan - Be operating in the services sector and - Be registered at the Companies Control Department or line ministries and - Employing 5 to 250 employees (exceptions) and - Be 100% privately owned and - Having a minimum paid-in capital of JD 5000 - Intending to raise a term loan.
Which projects and loans can be eligible? Eligible projects and loans must meet the following requirements:
- Maturity ranging from 2 to 6 years maximum - With a maximum one year grace period - The working capital items should not represent more than XX% (e.g. 25%) of the project cost and XX% of the loan (e.g. 15%). - No minimum or maximum size of the project cost or loan amount - The borrower’s contribution to the project costs should at least be 20% - The loan should not be used for financial restructuring or repaying prior debt - No need of audited financial statements. - No need of having a full business plan. How does it work? The guarantee is managed by the Jordan Loan Guarantee Corporation that entered into guarantee agreements with the participating banks. The guarantee is automatically granted to the bank upon approval of the loan if the size of the guarantee is below €30,000, this reducing the processing time. For guarantees exceeding this ceiling, the JLGC will review the loan application dossier submitted by the bank. The guarantee doesn’t require a specific intervention from the borrower, but it is useful for services SMEs to be aware of this facility and to know which banks are participating to the scheme.
Export Credit Guarantee Program Insure your company against export commercial risks JEDCO supports exporting SMEs by facilitating access to insurance and guarantees against the commercial risk inherent exports to foreign markets. By providing this security, JEDCO accompany its clients in the development of their sales both to Arab countries and globally. JEDCO has signed agent contracts with national, regional and international insurance and guarantee institutions, namely: The Arab Institution for Investment Guarantee Corporation and Export Credit in Kuwait and the Islamic Corporation for Insurance of Investment and Export Credit Company in Jeddah and the Jordan Loan Guarantee Corp. in Jordan. JEDCO can provide its clients with a privileged access to these insurance / guarantee mechanism. Access to better export financing By ensuring the collection of the export receivables, the programme also facilitates the refinancing of open account export sales. Post-shipment financing of your securities, promissory notes, bills of exchange, letters of credit, checks or any other commercial paper is made easier and on better terms. You are also in a position to offer better payment terms that will increase the attractiveness of your commercial offer on your export markets. JEDCO may assist you in getting the best offers from the market through its network with the banking sector.
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