Rural Credit Guarantee Foundation (AVHGA)

• Enterprises can be granted credit with less collateral.
• Institutional guarantee is a collateral independent from the debtor and thus, it significantly reduces credit risk.
• The Foundation undertakes guarantees for nearly every type of credit transaction.
• The Foundation undertakes guarantees for HUF transactions and transactions of any other currency.
• Guarantee fees of AVHGA are favourable.

To companies qualified as small and medium sized-enterprises registered in Hungary, which

• certifiably have no overdue public debt;
• do not have direct owners qualified as offshore enterprises;
• have no debt to AVHGA or any other guarantor institutions, financial institutions, or debt related to a central budget guarantee, or credit institution bank guarantee;
• according to the Central Credit Information System, have no credit debts overdue by more than 90 days; and further
• fulfil the terms of the Foundation’s Business Regulations.

The Foundation provides guarantees not only for agrarian enterprises but also for enterprises engaged in activities related to rural development. AVHGA considers all activities related to rural areas as rural development activities. Rural area is any area in Hungary, except for Budapest and towns of county rank, where the enterprise is related to a rural area in terms of location, supplier, buyer, employee, ownership or otherwise.

• The guaranteeable credit types are current account overdraft, working capital loan, investment loan, credit line, multi-purpose credit line, guarantee, guarantee line, maximum 1 year factoring and financial leasing transactions.
• The maximum guarantee amount provided by AVHGA is EUR 2 500 000 taking into consideration the limitations regarding the subsidy categories.
• The maximum rate of guarantee is 80% up to HUF 200 000 000 transaction amount. For transactions above this amount AVHGA provides guarantee according to its General Business Conditions.
• In addition to the AVHGA guarantee, other collateral is required for the loan transaction (e.g. owner’s joint and several guarantee, security deposit, mortgage, etc.).
• The AVHGA guarantee is qualified as state subsidy due to its advantageous fees and the state counter guarantee, but enterprises that have exceeded ‘de minimis’ and ‘agricultural de minimis’ subsidy limits or are excluded from the agricultural block exemption subsidy category can also get guarantee with COSME counter guarantee, or on AVHGA’s own risk or under marked conditions.

• AVHGA’s General Conditions of Contract for Guarantees, the so called Declaration of the Enterprise both signed by the credit applicant and the documents to be submitted to the Hungarian State Treasury.
• Certificates of „de minimis” and „agricultural de minimis” subsidies granted to the enterprise in the last three years.
• Documentation required by the bank for the credit assessment.