Guaranteed Leasing

What are the benefits?

Leasing guarantees, provided by INVEGA, offer solutions to unattractive or insufficient conditions and facilitate the access to the funding sources.

What companies are eligible?

Business start-ups, small and medium-sized enterprises.

What is the maximum amount?

The amount of the leasing guarantee may not exceed EUR 1,448,100 or, in the case of a lessee that has operated for less than 3 years on the date of submission of the guarantee application to INVEGA, may not exceed EUR 579,240.

The lessee must pay a downpayment to the leasing company for the leased property which must be at least 10 per cent of the price of the leased property.

The amount of the leasing guarantee may not exceed the difference between 70% of the price of the leased property and the downpayment and its amount may not also exceed 60 per cent of the price of the leased property.

How does it work?

In order to use this financial instrument, business start-ups and small and medium-sized enterprises are required to apply directly to the financial institution and agree on funding. The financial institution will assess the project, ability to repay leasing and calculate the amount of guarantee needed. Subsequently, the financial institution will submit a request for a guarantee on a leasing as well as other related documents to INVEGA.

Leasing and lessee

In this case, leasing is understood as a service where the leased property independently chosen by the lessee and acquired into ownership by the leasing company is handed over under the leasing contract for use and management to the lessee and where a leasing guarantee is provided as security for the payment of part of the price specified in leasing contracts of the leased property. After the lessee makes full settlement with the leasing company, this leased property becomes the property of the lessee.

Other services provided by leasing companies (operating lease, leaseback, etc.) do not qualify for INVEGA guarantees. Refinancing is not available if equipment is leased.

Other services provided by leasing companies (operating lease, leaseback, etc.) do not qualify for INVEGA guarantees.

Depending on the specific nature of service, the lessee must:
• be a company or an entrepreneur established and operating in Lithuania,
• be a small or medium-sized business,
• comply with the provisions of Commission Regulation (EU) No 1407/2013,
• have a leasing contract with a leasing company on the acquisition of property by way of financial lease,
• the lessee is eligible to receive de minimis aid (see the section on de minimis aid)

Moreover, the lessee must acquire the leased property seeking to use it directly in its production, service provision and/or construction activities (i.e. the leased property is not intended to be sold, leased or otherwise transferred for use to another undertaking).
The lessee must pay a downpayment to the leasing company for the leased property which must be at least 10 per cent of the price of the leased property.

Main terms and conditions for receiving a leasing guarantee

The amount of the leasing guarantee may not exceed the difference between 70% of the price of the leased property and the downpayment and its amount may not also exceed 60 per cent of the price of the leased property.

The amount of the leasing guarantee may not exceed EUR 1,448,100 or, in the case of a lessee that has operated for less than 3 years on the date of submission of the guarantee application to INVEGA, may not exceed EUR 579,240.

A leasing guarantee may be provided if the leased property meets all of the following requirements:

  • The leased property is production equipment (machine tools, mechanisms, instruments, devices, tools, plant and agricultural and forestry machinery, with the exception of consumables, passenger and freight vehicles, trailers, semi-trailers, ships, railway and tramway locomotives, rolling stock, aircraft) and/or installations;
  • The leased property is new, i.e. the manufacturing date is no later than 24 months before the conclusion of the leasing contract;
  • The leased property is not second-hand, i.e. the leased property has not been used for its intended purpose by other undertakings. Testing, tuning, verification of completeness or functionality of equipment and/or installations and similar actions carried out before the sale of equipment and/or installations are not considered as the use of the leased property;
  • The leased property is intended for manufacturing, service provision or construction activities. In addition, the leased property is not intended to be used for household, rent, wholesale or retail activities, provision of transport services, real estate rental, leisure, sports, health (except for medical activities) activities;
  • The leased property does not form an integral part of residential premises and/or non-residential buildings or other real estate;

The leased property is tangible assets or tangible assets together with the associated intangible assets (such as software, licence, etc.).
Leasing of vehicles, including cars, does not qualify for INVEGA guarantees. A leasing guarantee is provided on condition that the financed project (acquisition of leased property) is recognised by INVEGA as being financially sound (able to pay off) and eligible for financing.

Issue of a leasing guarantee

Applications for leasing guarantees submitted by leasing companies have to be processed by INVEGA within 20 calendar days after the receipt of the required documents.

The decision to issue a leasing guarantee is made by the managing bodies of INVEGA on recommendation of the Risk Management Committee of INVEGA – the Director General of INVEGA or, in special cases, the Board of INVEGA.

The Director General of INVEGA or an employee of INVEGA authorised by him or her signs a written guarantee within 3 (three) working days after the receipt of the leasing contract and the payment of the guarantee fee.

Leasing guarantee fee

The lessee pays a guarantee fee to INVEGA for the issuance of the leasing guarantee.

The guarantee fee will be calculated on the basis of the guarantee amount and the duration of the use of the guarantee, i.e. a fixed base for the first year of use (1 to 12 months) and an annual charge for each subsequent year. The fixed base will depend on the lessee’s age (up to 3 years – 1 %, over 3 years – 1.5 %). The annual charge will be 0.2 % for each additional year (i.e. 0.2 % for 13–24 months, for 25–36 months, etc.).

Please find below the pricing table:

Segment
Fixed base
Annual charge
All companies up to 3 years 1 % 0.2 %
All companies over 3 years of age 1.50 % 0.2 %

* – the age of the company is calculated as from the date of receipt of the guarantee application.

Examples of guarantee pricing.

1) Age of the lessee is up to 3 years, the lease term is 4 years, and the duration of the guarantee is 3 years.

Guarantee fee = Fixed base + (n * annual charge)
Guarantee fee = 1 % + (2 * 0.2 %) = 1.4 %

2) Age of the lessee is over 3 years, the lease term is 5 years, and the duration of the guarantee is 4 years.

Guarantee fee = Fixed base + (n * annual charge)
Guarantee fee = 1.5 % + (3 * 0.2 %) = 2.1 %
De minimis aid

Leasing guarantees are provided as de minimis aid under Regulation No 1407/2013.

The aggregate amount of de minimis aid provided and/or intended to be provided in the current and 2 previous financial years may not exceed EUR 200,000 per company. The maximum amount of de minimis aid for road transport companies is EUR 100,000.

These thresholds apply irrespective of the form of de minimis aid or objectives to be achieved and whether the aid provided is fully or partially financed from resources originating in the EU.

The amount of de minimis aid provided in the form of a leasing guarantee is calculated according to the provisions of Regulation No 1407/2013 and depends on the amount and duration of the guarantee. Before adopting a decision to provide a leasing guarantee, INVEGA verifies that the lessee is eligible to receive de minimis aid and calculates the amount of de minimis aid which would be provided in the form of a leasing guarantee and fee financing and reserves it in the Register of Provided State Aid. Once INVEGA decides to provide a leasing guarantee and issues a written guarantee, the relevant amount of de minimis aid is registered in the Register of Provided State Aid.