Innovation Loan Offers Flexible Financing for Technology and Product Development

The Innovation Loan from the Estonian Business and Innovation Agency is intended for companies developing new technologies, products or services that need additional financing to reach the next stage. It is particularly relevant when a project has clear innovative value but does not fit neatly into traditional grant schemes or is too early, complex or risky for standard market-based financing.

The loan can be used by small and medium-sized enterprises as well as large companies. In general, the project is expected to have reached at least Technology Readiness Level 5, meaning that the solution has already been initially tested and validated in a relevant environment. This makes the loan suitable for companies that are beyond the idea stage and are preparing to scale development, invest in production capacity, move towards market entry or strengthen the commercial readiness of an innovative solution.

The loan amount can reach up to €5 million, with a loan period of up to 15 years. No collateral is required, the interest rate starts from 2% per year and the contract fee is 0.5% of the loan amount. The loan may be used to finance project-related personnel costs, investments in tangible and intangible assets, working capital, applied research, product development, feasibility studies and other activities connected to the development of products and services.

Applicants must demonstrate that the project is innovative and that the company is creditworthy. The company must also meet equity requirements, have no outstanding tax arrears and be able to show that the project has sufficient technological maturity. Certain sectors and activities are excluded, including real estate development for sale or rental, gambling, primary agriculture, forestry, parts of fisheries and aquaculture, several infrastructure-related sectors and other restricted activities.

For companies planning larger innovation projects, the loan may also be combined with bank financing. In such cases, it is advisable to contact both the bank and EIS early so that financing terms can be aligned before the project moves forward.