Providers of travel and public catering services may now apply to the national development agency Investicijų ir Verslo Garantijos (INVEGA) for direct loans intended for travel services providers for settling accounts with tourists for cancelled trips and providers of accommodation or public catering services for financing necessary costs. EUR 30 million was allocated for these target loans.
“These businesses are among the most affected by the pandemic and were therefore given a priority when considering conditions for providing loans with preferential terms. Following lifting of the quarantine, companies providing tourist services may resume some of their operations and avail of target loans with preferential terms to finance some of their necessary operational costs required before they can restore their normal activity volumes,” said Kęstutis Motiejūnas, head of INVEGA. “Every company’s situation is different, but we hope that they will evaluate their situation and avail of the loans intended to stabilise operations and retain employees.”
According to the head of INVEGA, in the process of developing this measure, the comments of the business community have been taken into account in order to better understand the particularities of this sector: the proposals to take into account the effect of the pandemic not only on trips by bus or charter flights but also by regular flights and to provide opportunities to apply for the loans to a wider array of companies providing accommodation services and large public catering enterprises have been considered.
Travel services providers may avail of the loans with preferential terms provided by INVEGA to settle accounts with tourists for cancelled trips in case tourists who have valid contracts refuse to accept the proposed coupons. The loan amount is determined on a case-by-case basis, with consideration of the amount that the relevant travel services provider must refund to tourists for trips cancelled due to the COVID-19 outbreak. If need be, the loan amount may be raised, but in any case it may not exceed the maximum amount of EUR 3 million. It should be noted that tourist trip contracts had to be concluded by 16 March 2020 and had to be performed starting from 1 February 2020.
If a tourist services provider receives a loan of up to EUR 20,000, the loan is provided for a term of up to 18 months; in all other instances, the loan term is up to 72 months. The repayment of the loan starts 6 months after the date the relevant loan agreement is concluded if the term is up to 18 months or 12 months after the relevant loan agreement is concluded if it is concluded for a term longer than 18 months.
“When we were considering the start of repayment of the loans, we aimed to provide businesses with sufficient time to get back on track, i.e. to focus on the restoration of their operations, stabilise their financial flows and to direct their financial resources where they now need them most. We understand that, at present, the continuity of operations and the retaining of employees rather than loan repayment are the most important tasks for these companies,” said Mr. Motiejūnas.
Loans with preferential terms for businesses providing accommodation or public catering services are intended to finance necessary costs, e.g. salaries not compensated by the State, transport lease and purchase of other services, real estate tax (if not compensated by the State under the relevant measure), property maintenance costs, repayment of other loans, utility services and other administrative costs. With consideration of these costs incurred to ensure operational continuity, the maximum loan amount of EUR 3 million has been envisaged.
Loan agreements with providers of accommodation or public catering services will be concluded for a term of up to 72 months, and repayment of the loans will start not later than 12 months after the date the relevant loan agreement is signed.
The interest rates on the loans both for travel services providers and companies providing accommodation or public catering services are determined with consideration of the loan term and company size: the interest rate is 0.1–0.69% for SMEs and 0.19–1.69% for large enterprises.
Providers of travel and public catering services must submit their applications for the loan online at https://tour.invega.lt by 30 November 2020, and loan agreements may be concluded by 31 December 2020.