Frequently asked questions
General questions
What kind of clients does BACB serve?
What are the products offered by BACB?
The Bank is specialized in lending and along with that it offers bank services such as deposits, current accounts, transfers in the country and abroad.
How does the Bank work with its clients?
The BACB experts discuss with the clients all individual problems and issues to find out together the best solution.
What types of projects does the Bank finance?
Projects are financed in the field of construction, hotel business, as well as projects of the small and medium size enterprises and citizens.
Construction crediting program
What is the collateral?
The building under construction – the right to construction of the free apartments, garages, etc. The collateral does not include apartments of compensated owners (if any) and real estates sold in advance.
Until the Permit for Use of the Building is obtained, the so-called “Collateral security” shall be required – an apartment, an office or a shop outside the building under construction. One real estate shall be sufficient. There is no fixed price of the real estate. The bank shall release the real estate from the security at obtaining the Permit for Use.
Is a business-plan necessary?
No, it is not. The loan analysts, construction experts and architects working in the department shall perform all analyses, forecasts and appraisals related to the approval of the credit.
What is the term for processing the credit application?
About 3 weeks, depending on the readiness of the client to present the documents included in “The List of Documents Needed for Application for a Construction Credit”
What does the investor’s needed own participation in the construction include?
The Investor's Equity Contribution includes the land cost (all amounts actually paid for the land), the design cost, the cost for obtaining the necessary and permits from states authorities and operational utility companies, all amounts paid for independent construction supervision and the construction cost incurred to date.
Is there a grace period?
The whole period of the credit is a grace period. The principal shall be redeemed from the proceeds received from the sale of apartments. There is no repayment schedule – the credit shall be completely paid off by the last day of the credit term.
At the wish of the Borrower it is possible to pay the accrued monthly interest rates by non-cash payment – the interest due shall be added to the principal balance and shall be paid at a later stage form proceeds from sales of units from the project.
What is the term of the credit?
The term of the credit consists of two different periods:
- Construction period – the remaining term for the construction until the Permit for Use is obtained;
- The sales period – the term needed for the final sale out of the real estates left for sale after the Permit for Use is obtained
The maximum term of the credit is three years. The term may be longer in case the Project is large and the construction is executed in stages.
What is the maximal credit amount?
There is no fixed maximum loan amount.Generally the future construction expenses determine the credit amount. In case of big-size projects the credit amount shall depend on the decision of the Bank for the specific event and on the possibility to organize the construction in stages.
Hotel lending program
What are the conditions for granting a loan - а) term, b) interest rate, c) collateral
- up to 10 years – the program mainly grants investment credits for the purchase, construction, repair and expansion of hotels, restaurants and tourist sites;
- it varies and is negotiated with each client;
- it is negotiated depending on the project.
Is a business-plan necessary?
No, a business plan is not necessary to be submitted, but a short description of the type of business activity and the specific project.
In what parts of Bulgaria do we finance?
All over the country, business hotels and tourist/ resort complexes.
How is the principal paid?
Depending on the seasonality of the business and the cash flows.
Do we finance 100%?
Yes, we do – in event of the expansion of an existing hotel/ tourist business. In case the project is a start-up we expect the Borrower to share the financial risk.