Real Estate-secured Business Loans

Purpose

Conducting entrepreneurial activities

Currency

AMD, USD

Collateral

Residential, public or commercial real estate

Type of the interest rate*

Fixed interest rate for the first 24 months and a floating interest rate from the 25th to the 120th month.

*The interest rate is determined by the terms of the loan, for example: the loan amount, the loan term, the loan-to-value ratio, the location of the property, etc.

Annual interest rate* (nominal) for loans with proof of income

AMD: Fixed interest rate 14.5% - 17.5%

Floating interest rate: IBRR* + /5.2%-8.2%/

*The IDBank reference rate (IBRR), and its calculation methodology are presented through the following link. For loans granted under these terms and conditions, the IBRR may be changed twice a year, in May and November. In this case, such change shall take effect 30 calendar days after publication. The minimum and maximum thresholds of the floating (nominal) interest rate on the loans in USD - 7.5% and 16.5%, and - 9% and 19% on the loans in AMD respectively.

Annual interest rate (nominal) for loans without proof of income

AMD: Fixed interest rate 15% - 18%

Floating interest rate: IBRR + /5.7%-8.7%/

Annual interest rate (nominal) for loans with proof of income

USD: Fixed interest rate 10%-12%

Floating interest rate: IBRR + /6.1% - 8.1%/

Annual interest rate (nominal) for loans without proof of income

USD: Fixed interest rate 11․5% - 13․5%

Floating interest rate: IBRR + /7.6% - 9.6%/

Minimum term

36 months

Maximum term

120 months

Minimum amount

AMD 5,000,001 or equivalent in USD

Maximum amount* for loans with proof of income

AMD 125,000,000 or equivalent in USD

*This includes the aggregate amount of all outstanding loan obligations of the Client and its related parties to the Bank, with credit lines/overdrafts being included in the calculation up to the contractual amount, and liabilities secured in foreign currency being included in the calculation at the Central Bank of Armenia’s exchange rate for that currency on the date the decision to grant the loan was taken.

Maximum amount* for loans without proof of income

AMD 25,000,000 or equivalent in USD

*This includes the aggregate amount of all outstanding loan obligations of the Client and its related parties to the Bank, with credit lines/overdrafts being included in the calculation up to the contractual amount, and liabilities secured in foreign currency being included in the calculation at the Central Bank of Armenia’s exchange rate for that currency on the date the decision to grant the loan was taken.

0.1%

0.1%

5% of the loan amount repaid early

*The Customer also has the right to perform (repay) their obligations under the loan agreement ahead of the schedule, regardless of whether such a right is provided for in the loan agreement.

PLEDGED ASSETS AND/OR FUNDS MAY BE SUBJECT TO FORECLOSURE N ACCORDANCE WITH THE PROCEDURE PRESCRIBED BY LAW, IF THE LOAN AMOUNT AND INTEREST ARE NOT PAID ON TIME. PLEASE NOTE: THE BANK SHALL SUBMIT CUSTOMER INFORMATION TO THE CREDIT BUREAU WITHIN ONE WORKING DAY AT THE LATEST, WHERE THE CUSTOMER’S CREDIT HISTORY IS FORMED. THE CUSTOMER MAY OBTAIN THEIR CREDIT HISTORY FROM THE CREDIT BUREAU FREE OF CHARGE ONCE A YEAR. PLEASE NOTE: A POOR CREDIT HISTORY MAY HINDER OBTAINING LOANS IN THE FUTURE.

Maximum loan-to-value ratio (based on the estimated realisable value of the property)

for loans with proof of income։ 70% if the collateral is an apartment or a public premises, 50% if the collateral is a residential building and a plot of land, etc.

for loans without proof of income։ 60% if the collateral is an apartment or a public premises, 40% if the collateral is a residential building, a plot of land, etc.

Loan application processing fee

Not charged

Loan origination fee

Not charged

Monthly loan servicing fee

Calculated on the basis of the outstanding loan balance: 0.1%

Loan disbursement method

Non-cash transfer: via a current account. For fees relating to opening and maintaining an account, see the link: Information Bulletin on Tariffs

Repayment of the loan and interest

1. Annuity schedule: equal monthly instalments comprising both principal and interest.

2. Declining balance: equal monthly repayments of the principal, with interest paid monthly.

3. Hybrid: repayment of the principal depends on the customer’s cash flow, while interest is paid monthly.

Status

Legal entities and individual entrepreneurs who are residents of the Republic of Armenia

Minimum duration of business activity

for loans with proof of income:6 months

for loans without proof of income:Not specified

Age restrictions

The borrower, if an individual entrepreneur, must be at least 21 years of age on the date the loan is granted and must not be over 65 years of age on the date of final repayment of the loan.

Requirements to the credit history

-No outstanding overdue or classified liabilities (including loans, credit facilities, overdrafts, guarantees issued and other liabilities: this also applies to the pledger/guarantor),

- A lack of credit history is acceptable,

-The customer must not be included in the Bank's list of undesirable customers*

Legal relations relating to the classification of clients deemed undesirable by the Bank are governed by the procedure ‘On the Bank’s Establishment of Criteria for Classifying a Client as Undesirable and the Management of Relations with Such Clients’ available at the link: https://idbank.am/en/information/helpfull-information/RL-0350-0001-04-eng.pdf

DTI – debt-to-income ratio (the ratio of total average monthly debt obligations to net income/profit)

AMD- up to 60%, USD- up to 55%

Collateral*

Residential, public or commercial real estate situated within the territory of the Republic of Armenia, including a separate plot of land designated for ‘urban land use’, which must be located in the city of Yerevan,

*As additional collateral, the Bank may require a guarantee from a natural or legal person*

*In the event that the borrower fails to fulfil their obligations or delays their performance, the guarantor shall be liable as provided for in the agreement. This may include the enforcement of a claim against their property and/or funds as a result of the fulfilment of the obligations, as well as a deterioration in their credit history as a result of information being reported to a credit bureau.

Pledger

Any natural or legal person (if the pledger is a legal person, the latter must be registered in the Republic of Armenia)

Appraisal of a subject of collateral

The collateral must be appraised by one of the specialist organisations cooperating with the Bank. A list of these organisations is available via the following link: List of Appraisers*

*In addition to the charges set by the Bank in these Terms and Conditions, fees for services provided by third parties may be subject to change by those third parties.

Minimum requirements to the subject of collateral

1.The real estate must have a stone, panel or reinforced concrete structure, with the exception of partition walls and floor slabs.

2.The real estate must not be a dormitory or be situated on the premises of another building that is a dormitory.

3.The real estate must not be situated on land designated as being of overriding public interest.

4.The residential house (detached house) must not have any common yard space, communal joint or communal shared ownership with other properties, or shared walls with neighbouring buildings.

Insurance covering the borrower’s death as a result of an accident and permanent total disability

may be required by the Bank, based on the outstanding loan balance (applicable to individual entrepreneur borrowers). The list is provided at the following link: List of Insurance Companies.*

*In addition to the charges set by the Bank in these Terms and Conditions, fees for services provided by third parties may be subject to change by those third parties.

Insurance of the collateral

may be required by the Bank based on the outstanding loan balance or the estimated market/liquid value of the property. The list is available via the following link: List of Insurance Companies.*

*In addition to the charges set by the Bank in these Terms and Conditions, fees for services provided by third parties may be subject to change by those third parties.

Master loan agreement

The Bank may conclude a master loan agreement with a customer for a term of up to 240 months.

Factors supporting loan approval

1)a positive credit history,

2)stable cash flows,

3) the collateral meeting the Bank's requirements

4) Other factors

Grounds for loan refusal

1) a poor credit history,

2) the collateral does not meet the Bank's requirements or the Bank considers that the property in question would be difficult to realise

3) the provision of false or inaccurate information,

4) the provision of information that raises doubts as to the customer's ability to repay the loan,

5) a poor credit history of a person related to the customer.

Maximum time limit for making a decision

for loans with proof of income: A maximum of 5 working days after submission of the full set of documents required by the Bank

for loans without proof of income: A maximum of 2 working days after submission of the full set of documents required by the Bank

Time limit for notifying the customer of the decision

1 working day

Maximum validity period of the decision

30 working days. The bank is entitled to refuse to grant a loan if there has been a change in the conditions deemed necessary for a positive decision on the loan (e.g. overdue liabilities, freezing or restriction of bank accounts, etc.)

Time limit for reconfirmation of the decision

At most once, within 10 working days of the decision’s expiry, subject to the lending terms in force on the date of re-confirmation.

Time limit for loan disbursement to the borrower

1 working day after receipt of the document confirming the right of pledge over the collateral

Place of application submission, loan processing and disbursement

All branches of the Bank

List of documents to be submitted by the customer

The list of the required documents is available via the following link: List of documents (For loans without proof of income, the documents required for the financial assessment are not needed.)

Information regarding credit history and credit score

You can learn about the importance of credit history and credit score here․

Details via abcfinance.am and acra.am links.