Five main reasons should make a company in the Black Sea region prefer BSTDB: competitive financing, speed of decision-making, loan size, competence of the staff and absence of a "political agenda".

BSTDB provides financing on competitive terms, with additional benefits such as country risk mitigation, networking possibilities, improved access to additional resources, and, last but not least, knowledge of the region.

Though BSTDB follows international standards in its procedures, the Bank is smaller than other international financial institutions (IFIs) and thus, able to respond more quickly to a business proposal. While the approval of most projects takes around six months, BSTDB has been able to process and approve some financings in less than four months.

A third reason is that BSTDB is flexible, i.e. able to process projects, especially in its smaller member countries, under the 5 million USD limit applied by many other IFIs.

The fourth reason to undertake an operation with BSTDB is the high qualification of its staff. The project teams, staffed by professionals with extensive banking experience, blend international and local expertise and are closely involved with the Black Sea countries.

Finally, the Bank has no political agenda or political or macroeconomic policy conditions attached to operations. The Bank was created by the countries of the region to promote economic activity and regional cooperation.

BSTDB follows the general rules of international financial institutions in this respect. In general, and as a part of the negative list, the Bank cannot finance projects that are environmentally harmful and/or linked to the production of military equipment, narcotics, tobacco and products derived from hard alcohol. (However, BSTDB can finance the production of beer, wines and other products with a moderate alcoholic content). BSTDB's full Negative List of Products is available at www.bstdb.org.

There are two main limitations. BSTDB, like other international financial institutions, in principle does not finance more than 35% of the total project cost. The Bank also has a loan ceiling for each individual project (the single obligor limit), which is 7.5% of paid-in capital, reserves and surpluses for debt and 3% for equity, subject to periodic revision. As far as the lower limit is concerned, the BSTDB shows flexibility in meeting the demands of its clients in the region, many of them being small businesses. Therefore, the Bank may consider financing starting from a few million USD, which is a lower limit than that offered by other IFIs. Even smaller loans may be provided through cooperating financial intermediaries (local banks) in member countries.

BSTDB follows internationally accepted standards in its project cycle. After a project proposal is presented to the Bank and initially screened, the concept is cleared by the Bank’s Credit Committee. Then, after appraisal and due diligence, the Credit Committee undertakes Final Review and, if approved, sends the operation for final approval to the Board of Directors. Once this approval is obtained, the loan agreement can be signed, followed by the disbursement of the loan. The same approval procedure applies for credit lines to financial intermediaries.

BSTDB proceeds as quickly as possible, depending on the quality of information obtained from the client, the capacity of the client, the complexity of the project itself and the risk involved. In general, the Bank aims for 3-6 months. However, the Bank will not proceed with financing until it is completely satisfied with all appropriate information and the legal documentation is fully verified.

The pricing and the terms of a loan are subject to individual appraisal. As with other institutions, pricing of an operation depends upon the cost of funds, a margin to cover costs, and a risk margin. As for fees and commissions, the Bank normally requires a front-end fee and a commitment fee. Following international practices, BSTDB may also request other fees depending on circumstances, such as an appraisal fee, a syndication fee, a management fee, etc.

A standard commercial security package, including - but not limited to - a pledge of shares, assets, bank accounts, etc., is generally required, while the Bank may also accept an offshore security. For certain short-term and low risk transactions, financing may be provided unsecured, but this is an exception, not a rule. The Bank does not normally seek a sovereign guarantee, but certain projects - particularly where state-owned entities or official agencies are involved and the nature of the operation may generate general economic benefits but not a direct financial return - may require such a guarantee.