SLOVENIA Law and Practice Contributed by: Vid Kobe and Peter Gorše, Schoenherr Slovenia
Direct lending from these alternative providers often introduces different loan terms compared to tradition- al bank financing. For example, loans from alterna- tive lenders may feature minimal amortisation require- ments before a bullet repayment at maturity, enabling borrowers to prioritise growth over immediate debt servicing. These loans also tend to have higher pric- ing, and in cases such as mezzanine financing may include equity kickers, which grant the lender the option to acquire an equity stake in the borrower or its affiliates. However, since alternative lending takes on various forms, the financing terms and structures employed by these providers can vary significantly, depending on the specific deal and provider involved. 1.5 Banking and Finance Techniques Although recently there has been an uptick in deals involving alternative credit providers in Slovenia, local borrowers continue to primarily rely on domestic banks for their financing needs. These transactions are generally structured using local banks’ template documentation, which tends to be simpler and less complex compared to loan agreements based on the Loan Market Association (LMA) standards. Syndi- cated lending remains relatively uncommon among Slovenian banks. However, in recent years, there has been a noticeable increase in syndicated and club deals led by foreign lenders in Slovenia. These transactions are typically based on LMA-recommended forms or, in the case of New York law-governed facilities, on a “documenta- tion precedent” – ie, the existing deal documentation of the sponsor or borrower, which may incorporate certain model provisions from the Loan Syndications and Trading Association (LSTA). The same trend can be observed in lending transactions of certain alterna- tive credit providers, in particular debt funds. This evolution reflects the growing influence of inter- national financing practices in the Slovenian market. 1.6 ESG/Sustainability-Linked Lending Most Slovenian banks are making significant efforts to improve the composition of their credit portfolios from an ESG perspective – driven, inter alia, by ESG- related reporting requirements. Generally, banks are willing to offer (commercially) better terms to borrow-
ers/projects fulfilling ESG-related criteria, eg, projects which encourage circular economy, or projects aim- ing to increase green energy. While certain borrowers have been able to meet/adapt to such requirements and manage to extract better borrowing terms, dem- onstrating ESG compliance tends to prolong the credit approval process. At the European level, the Defence Readiness Omni- bus proposal (17 June 2025) and the accompany- ing Notice on sustainable finance and the defence sector provide important clarification. They confirm that only controversial weapons fall outside the EU Sustainable Finance Framework, and financing of the defence industry more broadly is not restricted. This creates potential room for ESG-labelled financ- ing to extend into defence and dual-use industries, although in Slovenia, market practice still shows lend- ers are more comfortable with sectors that already have clear sustainability benchmarks. Overall, while lenders remain cautious in emerging areas such as defence, market appetite for ESG-linked products in Slovenia appears strong, particularly where borrowers can demonstrate credible sustainability strategies and transparent reporting mechanisms. 2. Authorisation 2.1 Providing Financing to a Company It is a generally accepted among practitioners and the regulator that lending/provision of credit to corporates in Slovenia only attracts regulation if performed by a (licensed) bank/credit institution. In Slovenia, the regu- latory trigger for a banking licence (or a passporting) requirement is the taking of deposits and other debt instruments ( vračljiva sredstva ) from the public. In the case of non-Slovenian credit institutions established in the EU/EEA, such services may be provided in Slovenia (i) to the extent these are covered by home regulators’ authorisation and (ii) based on establish- ment of a branch or by way of cross-border provision of services based on an EU passport. Non-EU/EEA credit institutions may provide such services subject to establishing a branch in Slovenia. That said, it should be noted that the provision of loans/credit by entities other than credit institutions
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