Velimira Škorpika 24
10000 Zagreb
tel: 01 3458555
fax: 01 3458444
Trg Republike Hrvatske 1
51000 Rijeka
tel: 051 688 122
fax: 051 688 120
Put Supavla 1
21000 Split
tel: 021 684 462
fax: 021 684 460
S.L.B. Mandića 50a
31000 Osijek
tel: 031 445 045
fax: 031 445 046


Depreciation is a gradual decrease in value of company assets, calculated annually according to the procedure prescribed by law. As the amount of depreciation is deducted each year from the tax base, the method of depreciation affects the decision on financing the procurement of equipment.
An annuity is the amount by which the loan, credit or lease is repaid over a specified period. An annuity is a fixed amount that is repaid gradually according to the depreciation plan. It also includes a part of the debt and accrued interest, and is set so that the debt is fully paid.
Creditworthiness (Bonitet)
The term bonitet (Croatian) and is derived from the Latin word bonus (good, good, quality, etc.). In business practice the word denotes the value, reliability, legal capacity and especially creditworthiness.  By assessing the partner’s creditworthiness a decision on accepting the job is made,  the price is formed based on the perceived risk, the assessment of the security of future income is made, and ones own financial investments are structured, etc.
Evaluating the creditworthiness is a serious and professional job based on a detailed study of balance sheets and other company statements, including the  analysis of the companies past and future, while the assessment also includes the companies reputation that cannot be expressed in figures, but has its own value.
The discount that the insurer approves to the insured if he has had no damages (no-claims) or if the damages are not related to the premium. The bonus is approved on the total amount of the premium, not only on the part of the premium (net premium) that is intended for claims expenses. The insurer is not required to accrue bonus to the insured, but in order to meet the damages it can be expected that the bonus will be used in the calculation of other insurance types. The opposite of a bonus is a malus (additional premium)
Exchange rate
The exchange rate is the price of one currency expressed in another currency.
Effective interest rate
The effective interest rate (EIR) is the rate that represents real leasing costs paid by the lessee, or the total cost of leasing. The amount of the effective interest rate is influenced, besides the regular interest rate, by the amount of fees the client pays to the lessor upon the approval of financing, by the length of the repayment of leasing contracts, by the amount of possibly required guarantee deposit or shares etc. The method of calculating the EIR is unique for all banks, and it is prescribed by Croatian National Bank.
Financial leasing
In financial lease the subject of the lease becomes fully owned by the lessee with the payment of the last lease instalment. For the entire duration of the contract the lease is recorded in the business records of the lessee as an investment and is presented in the balance sheet as a liability. The value of the lease is accounted in the  gross payable amount with VAT included, or in equal instalments over the lease period, or as a lump sum at its end.
The percentage or amount of damages determined by the insurance contract, for which the insurer assumes no compensation obligation. Also called the contracted retention.
HANFA (Croatian Agency for Supervision of Financial Services) was established on 1 January  2006, with the termination of the Directorate for the Supervision of Insurance, Securities Commission and the Croatian Agency for Supervision of Pension Funds and Insurance.
It supervises insurance companies, leasing companies, financial and pension funds.
Compound  interest
A way charging interest for the period of long-term loan use in which the amount of the loan is used repeatedly. For every part of the loan that is used, the interest is calculated from the moment of utilization to the beginning of the repayment of the loan. For loans that are used at once, compound interest is calculated from the date of utilization to the beginning of regular payments. The value of compound interest is typically equal to the regular interest. It can be paid as a one-off payment or it can be included in the regular annuity payments.
The guarantor
Co-borrower and guarantor are persons who, together with the lessee jointly and severally guarantee the bank regular repayment and give consent that in the case of irregular repayment of the loan, the bank can collect its claims from them. The difference between them is that a co-borrower apart from providing guarantee enhances the creditworthiness of the borrower, so the co-borrower is only necessary when the borrower is not fully creditworthy, e.g. when the borrower does not have sufficiently high salary for the requested loan amount.
The deposit is the contracted amount deposited with the lessor for the entire term of the lease, as an interest-free security for the due and punctual payment of all outstanding claims of the lessee. The minimum and maximum amounts of the deposit depend on the contractual term of the lease.
Guarantee is an agreement with which a third party, the guarantor, agrees to fulfil the obligation of the debtor if the debtor fails to do so. The guarantor’s liability is accessory liability, which means that the guarantor is liable only if a valid obligation of a principal debtor exists.
Guarantee Agreement obliges the guarantor only if the statement of guarantee was made ​​in writing. Guarantee, as an accessory obligation, ceases if the obligation of the principal debtor ceases in any way. The guarantee may be terminated independently, e.g. when the lessor releases the guarantor or when the lessee procrastinates. With the statute of limitations of the principal debtor the liabilities of the guarantor also expire.
The fee for using other parties’ replaceable, movable property, usually money. The amount of this fee shall be assessed according to the principal amount and duration of its use.
Interest rate
The interest rate is the one hundredth part of the price stated for borrowed capital. The level of the interest rate differs and depends on the duration of the payment insurance and on the safety of the claims. The interest rate changes under the influence of supply and demand in the capital market and is therefore a barometer of business cycle shifts. The foundation of a general interest rate is the discount rate of the central bank.
Leasing is a special form of financing based on the idea that it is better to use the subject of the lease rather than buy it. Leasing allows the recipient to use the vehicle, equipment or property according to their needs. There are two basic types of leases - financial and operational. They differ in the ways of acquiring ownership of the subject of the lease, conditions of approval and the method of calculating the cost of lease and in the tax treatment. The advantages of leasing are: leasing instalments are repaid from revenues generated from the use of the subject of the lease - the principle of "pay as you earn", tax benefits – the (operating) leasing costs are fully recognized as an operating expense while VAT is paid in monthly instalments, liquidity – the capital remains available to the user for other investments or as working capital, credit worthiness - leasing, unlike loans, improves financial indicators of liquidity and indebtedness.
Compulsory insurance
Compulsory insurance is the insurance against certain risks required by the law of a country.
Under the provisions of the Insurance Act in Croatia compulsory insurance applies to:
1. passengers on public transport in case of accidents, including buses that carry passengers; rented vehicles; taxis; aircraft for public transport and aircraft for tourist transport;
2.  owners or users of motor vehicles for liability for damage caused to third parties;
3.  owners or users of the aircraft for liability for damages caused to third parties.
Operating lease
With operating lease the subject of the lease remains the property of the lessor (leasing company) for the duration of the lease, but upon its expiration it can be sold to third parties.
The value of the subject of the lease is accounted for in the net amount without  VAT, which is to be paid in equal monthly instalments for the entire duration of the lease.
The costs of operating leases are recognized as operating expenses and reduce the base for profit tax payment.
The ledger value of an operating lease is not recorded in the indebtedness balance sheet, which does not reduce the value of the company.
Upon contracting the lease the payment of the guarantee to the lessor is mandatory, which is expressed as a percentage of the initial value of the subject of the lease.
Upon expiry of the lease contract the equipment or real estate concerned can be replaced with another one (new and more up-to-date).
Residual value
It represents an agreed-upon value of the leased asset, at the end of the lease term, which is based on the expected market value of the leased asset and as such is the basis for calculating the amount of the lease instalment. The minimum and maximum amounts of residual values ​​depend on the agreed duration of the lease and the agreed annual mileage limitation.
Insurance policy
An insurance policy is a contract document of the insurance signed by the insurer, (can be a facsimile of a signature) contained in the insurance contract.
It is mandatory that the policy is signed by all co-insurers. The policy must specify all contracting parties, the insured subject or person, the risk covered by insurance, the duration of the insurance and time of coverage, the amount of insurance or the limit of coverage, premiums or fees and the issue date.
General, additional and special conditions are integral parts of the insurance contract and can be printed on the insurance policy, or should be attached to the insurance policy, which must be specified in the policy itself.
The most modern model of financing where the subject of the lease is the asset of the lessee, while the lessee temporarily sells their property to the leasing company.
The asset is continually used through the lease, and the user frees his capital and can use the released funds for new investments. Upon expiry of the leasing contract the owner again becomes the owner of his property.
The cost of processing
It is the inevitable cost which enables the financial institution or company to perform the assigned tasks. It can be defined as the total cost of operations, and consists of variable and fixed components. The variable component changes with the level of activity, while the fixed burdens the costs whether the company works or not.
Down payment
The amount of money with which the lessee participates when entering into a finance lease agreement.
Lease agreement
The contract by which one person (the lessor) provides for a limited time the use of the subject of the lease to another person (the lessee) for a limited period of time, while the lessee pays the fee for leasing. The following can be agreed on at the end of the lease period:
  1. the lessee returns the subject of the lease to the lessor
  2. the period of use is extended, or
  3. that the lessee redeems the subject of the lease from the leasing company, by which the ownership of the subject of the lease is transferred from the lessor to the lessee, in accordance with the General
Leasing business structure must be distinguished from the leasing contract. A business structure typically involves three business subjects: the supplier, leasing company (lessor) and the equipment user (lessee), while parties of the leasing agreement are the lessor and the lessee.