Aid guarantees for loans and financial lease transactions

What are the benefits?

INVEGA aid guarantees facilitate access to financing sources for businesses affected by the crisis caused by the military aggression of the Russian Federation against Ukraine (hereinafter referred to as the war). Aid guarantees are provided for new financial lease transactions and new loans, intended to finance investments into tangible and/or intangible assets or to supplement working capital.

Who is eligible?

Small and medium-sized enterprises, large enterprises affected by the crisis caused by the war in Ukraine.

A borrower or financial lessee is deemed affected by the crisis caused by the war if:

  • Its import or export operations have been disrupted by the crisis caused by the war. The total share of imports to or exports from Ukraine, the Russian Federation, the Republic of Belarus made at least 25% of the total imports or exports of the borrower (including with the Member States of the European Union) from 1 January 2021 to 31 December 2021,
    or
  • The expenses for fuel, electricity and/or gas made at least 3% of the expenses in 2021,
    and
  • It does not have or terminated trade obligations with the Russian Federation and/or the Republic of Belarus by 30 June 2022 at the latest.

Documents to be completed and submitted by the financial institution:

  1. Application for a guarantee for a loan (by filling in the prescribed form).
  2. Application for a guarantee for a financial lease transaction (by filling in the prescribed form).
  3. Decision of the financial institution on granting the loan.
  4. Assessment of the borrower by the financial institution.

Documents to be completed by the borrower:

  1. Annex No. 1 to the application for a guarantee (by filling in the prescribed form).
  2. Small and medium-sized enterprise status declaration (by filling in the prescribed form) or certificate/letter specifying the size of the enterprise (“large enterprise”).
  3. Declaration of “single undertaking” (by filling in the prescribed form).
  4. Form of the financial position and forecasts of SME (by filling in the prescribed form).*
  5. Notification concerning personal data processing (by filling in the prescribed form).**
  6. Financial statements: balance sheet, profit and loss account.
    Sole proprietorships, which do not prepare financial statements under the Law on Financial Reporting by Undertakings, are to submit their income declarations for the past 2 years and the current period documents (certificates) of the form prescribed by the financial institution (or of free form) about: fixed tangible and financial assets, inventory, amounts paid in advance, amounts receivable, financial debts to banks and other financial institutions, other debts of the sole proprietorship.
  7. Additional documents:
    a. investment project or business plan;
    b. agreements, contracts, orders, letters of intent with clients confirming the fact of sales (their certified copies);
    c. property purchase and sale agreement;
    d. valuation of property to be purchased and/or pledged/mortgaged;
    e. expense estimate of construction, repair or reconstruction works;
    f. list of property planned to be acquired, with quantities and prices, commercial offers, etc.;
    g. in case of refinancing, documents confirming the fact of paid-up investments (purchase and sale agreements) and payment documents;
    h. authorizations and licenses held by the SME, necessary for the execution of the activity or the implementation of the project.
    The documents referred to will have to be provided upon a separate request from the INVEGA project assessor in cases where the material provided by the financial institution is not sufficient to assess the risks of the guaranteed project.

Notes:

  • All documents are to be submitted by a financial institution.
  • Documents must be signed with an e-signature. If this is not possible, documents with original signatures are to be submitted.
  • Examination of a project begins only upon receipt of all documents.
  • Applications for guarantees, requests for change of terms of a guarantee, contracts are to be sent by e-mail at info@invega.lt.
  • INVEGA has the right to demand that documents submitted in a language other than Lithuanian are translated into Lithuanian.

* This form has to be sent signed with an e-signature and in Excel format.
** Notifications of the borrower's head and citizens of the Republic of Lithuania or persons having a permit for permanent residence in Lithuania, holding a controlling interest of shares/ownership interest/other interest in capital, regarding personal data processing in case of collection of data from any state and non-state institutions, enterprises and organisations for credit risk assessment purposes, are to be submitted in these cases.

Other documents

Terms

The aid guarantees are provided for a maximum period of:

  • 72 months for investment loans and financial lease transactions;
  • 36 months for working capital loans.

The investment loan repayment postponement term cannot exceed 12 months and the repayment of the loan must be carried out by linear instalments.
Aid guarantees are available until 31 December 2022.

How much?

The maximum guaranteed amount for a loan or finance lease transaction per beneficiary:

  • 15% of the average annual turnover of the borrower or financial lessee in the last 3 years;
    or
  • 50% of expenses for energy during 12 months preceding the month of filing the application.

Guarantee intensity: up to 90%.

Note! The maximum amount of all available aid guarantees may not exceed EUR 10 million.


Use the calculator to check how much the guarantee would cost

DOWNLOAD THE CALCULATOR

How does it work?

Applications for guarantees or requests for change of terms of a guarantee and contracts are to be sent by e-mail at info@invega.lt.

The aid guarantees are granted:

  • for tangible investments – for the purchase, construction, repair or reconstruction of fixed assets;
  • for intangible investments – adoption of technologies by the acquisition of patents, licenses or other unpatented technical knowledge;
  • for working capital (in the form of a short-term credit and/or credit line) required to finance the activities of the borrower or (in the form of a credit line) for securing obligations (contract performance, bid validity, repayment of advance payment, payments);
  • for refinancing investments paid with the funds of an enterprise (no earlier than within 6 months preceding the date of receipt and registration of the application for a guarantee). In such a case, the application for a guarantee must be accompanied by the documents confirming the expenditure and its payment;
  • for financial lease transactions.

Conditions for loans

Loans not eligible for guarantees

1. If the borrower requests to finance activities in the following sectors:

  • financial and payment services and insurance (activity codes according to Divisions 64, 65, 66 of the statistical classification of economic activities approved by an order of the Director General of the Department of Statistics under the Government of the Republic of Lithuania (NACE Rev. 2) (hereinafter referred to as NACE Rev. 2));
  • distilling, rectifying and blending of spirits (activity code in class 11.01 according to NACE Rev. 2);
  • wholesale of alcoholic beverages (activity code in subclass 46.34.10 according to NACE Rev. 2);
  • manufacture of weapons and ammunition and/or their retail sale in specialised stores (activity codes in group 25.4 and subclass 47.78.30 according to NACE Rev. 2);
  • manufacture and/or wholesale of tobacco products (all activity codes in Division 12 and class 46.35 according to NACE Rev. 2);
  • gambling and betting activities (all activity codes in Division 92 according to NACE Rev. 2);
  • real estate transactions (all activity codes in groups 68.1–68.3 according to NACE Rev. 2);
  • agriculture (activity code in Division 0.1 according to NACE Rev. 2);
  • production and processing of agricultural products (activity code in groups 10.1, 10.3, 10.4, 10.5, 10.6, 10.7 and classes 10.81, 10.82 according to NACE Rev. 2);
  • forestry (activity code in Division 02 according to NACE Rev. 2);
  • fishery (activity code in groups 03.1 and 10.2 according to NACE Rev. 2);
  • aquaculture (activity code in group 03.2 according to NACE Rev. 2);
  • also in the areas listed in Article 1 of Regulation (EU) No. 1407/2013.

If the borrower carries out any of the above-listed non-eligible activities along with other – eligible – activities, it must ensure that the funds of the guaranteed loan will not be used to finance activities listed in this section. If the borrower is unable to ensure (separate) that the funds of the guaranteed loan will not be used to finance the restricted activity, a guarantee shall not be granted.

2. When the loan funds are used to pursue one of the following objectives:

  • to refinance the borrower’s obligations to financial institutions and other natural and legal persons, save for cases when a guarantee is granted for refinancing investments paid at the expense of the borrower no earlier than within 6 months preceding the date of receipt of the application for a guarantee;
  • to acquire financial assets;
  • to construct, acquire, repair or reconstruct real property in order to sell it or otherwise transfer it to other natural or legal persons, but not to use in the activities of the borrower and/or undertakings related to it, which together are to be regarded a single undertaking in accordance with Article 2(2) of Regulation (EU) No. 1407/2013;
  • where more than 40% of real property acquired with the funds of the loan will be meant for letting it to other natural or legal persons, which are not regarded a single undertaking together with the borrower in accordance with Article 2(2) of Regulation (EU) No. 1407/2013. This limitation shall not apply when the borrower provides hotel and/or other short-term accommodation services, carries out workspace rental activities or is in the business of storage of items;
  • to finance the acquisition of assets that would not be intended for performance of the borrower’s activities;
  • to finance investments carried out outside the territory of the Republic of Lithuania;
  • to make payments to members of the borrower;
  • to re-lend loan funds to other natural or legal persons.

3. Nor shall INVEGA’s guarantee be granted:

  • if the borrower and its beneficial owner, as it is defined in paragraph 14 of Article 2 of the Law of the Republic of Lithuania on the Prevention of Money Laundering and Terrorist Financing, or natural and legal persons for whose benefit the funds of the loan will be used, are subject to sanctions (any trade, economic or financial sanctions, embargoes or other restrictive measures), which are imposed, applied or administered by the United Nations Security Council, the European Union, the Republic of Lithuania, the Government of the United States of America (including the Office of Foreign Assets Control of the U.S. Department of the Treasury), the United Kingdom of Great Britain and Northern Ireland;
  • if the borrower does not meet minimal criteria for reliable taxpayers laid down in Article 401 of the Law of the Republic of Lithuania on Tax Administration. Compliance with this requirement shall be determined according to the information made public by the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania on its website at https://www.vmi.lt/evmi/mokesciu-moketoju-informacija;
  • if the borrower has not presented a set of financial statements for the past financial year to the state enterprise Centre of Registers where it is subject to such an obligation according to legal acts applicable to its activities;
  • if the borrower or its members are subject to the European Union sanctions in response to the war against Ukraine, as established in paragraph 33 of the Communication. Information on the sanctions imposed by the European Union on the Russian Federation and the Republic of Belarus is published on the website of the Ministry of Foreign Affairs of the Republic of Lithuania at www.urm.lt/sankcijos
Decrease of the guarantee balance

In case of the aid guarantees, INVEGA guarantees to the beneficiary of the guarantee cover the loss in case of unrepaid loan, within INVEGA’s liability limit. Losses due to unrecovered amount of the loan are to be covered pro rata by the beneficiary of INVEGA’s guarantee and by INVEGA. As the amount of the loan decreases, the guaranteed and non-guaranteed amount of the unrecovered loan decreases pro rata.

When a guaranteed loan is provided by way of a credit line with loan repayments and allowed repeated releases of loan funds without exceeding the credit line amount, INVEGA’S obligations according to the granted guarantee (guarantee amount) are not reduced upon loan repayments and, in calculation of the guarantee payment, the maximum guaranteed amount under the guarantee granted is equal to the difference between the actual balance of the loan amount and the part of the loan not guaranteed by INVEGA. In case of a credit line, the unguaranteed part of the loan is the amount received by deduction of the amount corresponding to the company's liability limit, calculated on the actual balance of the loan, from the actual balance of the loan.

Maximum amount of guarantee

The guarantee amount can be up to 90% of the loan amount.

In real estate purchase cases, the maximum limit of INVEGA’s liability cannot be more than 50% of the loan amount.

The maximum guaranteed amount for a loan transaction per beneficiary:

  • 15% of the average annual turnover of the borrower or financial lessee in the last 3 years;
    or
  • 50% of expenses for energy during 12 months preceding the month of filing the application.
Guarantee fee

The borrower shall pay a one-off guarantee fee for the guarantee before the issue of the guarantee.

The guarantee fee shall be determined with regard to the guarantee amount and duration of use of the guarantee, i.e. a fixed base shall apply for the first year of use (1–12 months), and an additional annual fee for each following year, i.e. when the guarantee period is 13–24 months, the additional fee for one year shall be payable, when the guarantee period is 25–36 months, the additional fee for two years shall be payable, etc.

Small or medium-sized enterprise Age of the enterprise Fixed base Annual additional fee
Working capital Investments
All SME guarantees up to 3 years 1.00 % 0.40 % 0.30 %
Working capital ≥3 years 1.00 % 0.40 % -
Investments ≥3 years 1.50 % - 0.20 %

 

Large enterprise Age of the enterprise Fixed base Annual additional fee
Working capital Investments
All guarantees for large enterprises up to 3 years 2.00 % 0.40 % 0.55 %
Working capital ≥3 years 1.00 % 0.80 % -
Investments ≥3 years 1.50 % - 0.65 %

A SME older than 3 years finances its investment with a bank loan issued for 4 years. It is going to cover the guaranteed part of the loan within 4 years.
Guarantee price = Fixed base + (n * Annual additional fee)
Guarantee price = 1.5% + (3 * 0.2%) = 2.1%

A SME older than 3 years borrows for working capital. The period of the bank loan is 2 years, the guaranteed part of the loan will be covered in 2 years.
Guarantee price = Fixed base + (n * Annual additional fee)
Guarantee price = 1% + (1 * 0.4%) = 1.4%

Participation of the borrower in project financing

The borrower, which may consist of an enterprise and/or its shareholders, owners and other members, must contribute own funds to the financed project, making up at least 20% of the project value:

  • In case of an investment loan, the borrower must invest at least 20% of own funds (net of VAT) into the financed investment project, whereas the equity ratio after granting of the guaranteed loan must be at least 0.1 according to the annual financial statements of the last financial year or the last interim financial statements;
  • In case of a working capital loan, it is deemed that the borrower takes part in project financing with own funds when its equity ratio after granting of the guaranteed loan is at least 0.1 according to the annual financial statements of the last financial year or the last interim financial statements. In calculating the equity ratio, equity is understood as share capital, share premiums, revaluation reserves, reserves, retained profit (loss).

Contribution of own funds is not required if the borrower is operating for up to 24 months and the amount of the requested guarantee does not exceed EUR 50,000. Upon assessment of risks of individual projects, a portion of own funds may be required for their implementation, the amount of which will depend on perceived threats.

Collaterals

In case of a guarantee for an investment loan, fixed tangible assets acquired with the funds of the guaranteed loan shall be mortgaged to secure repayment of the guaranteed loan. If the beneficiary of INVEGA’s guarantee so suggests and INVEGA consents, fixed tangible assets acquired with the funds of the loan may be not mortgaged for the guaranteed loan, when the beneficiary of INVEGA’s guarantee holds that assets acquired with loan funds are not a proper security for the loan due to their low liquidity or when the borrower offers to mortgage other fixed tangible assets worth no less that the fixed tangible assets acquired with the funds of the loan as the security for the loan. The market value or liquidation value of fixed tangible assets is determined by the beneficiary of the INVEGA guarantee in accordance with its regulated internal procedures.

Conditions for financial lease transactions

Granting of a financial lease guarantee

INVEGA can grant a financial lease guarantee to a financial lease company that finances the purchase of equipment, i.e. a credit institution or financial undertaking, as defined in the Law of the Republic of Lithuania on Financial Institutions, and the main activity of which is financial lease, if an enterprise established and operating in Lithuania, meeting requirements for a small and medium-sized enterprise, is going to acquire manufacturing facilities and/or equipment by way of financial lease. The guarantee ensures the payment of a part of the financial lease amount in the event of the bankruptcy of the financial lessee.

INVEGA’s obligation to pay a financial lease company according to the granted financial lease guarantee shall be fulfilled if, in case of insolvency or winding up of a financial lessee, the financial lease company failed or it is objectively probable that it will fail to fully recover the financial lease amount from the leased assets, the financial lessee and in any other ways offered by the financial lessee to secure repayment of the financial lease amount.

After the financial lessee repays a part of the financial lease amount, this amount will proportionality reduce the financial lease amount, both secured with the aid guarantee and unsecured.
The financial lease guarantee shall be granted on the condition that the financed project (acquisition of leased assets) is recognised by INVEGA as financially reasonable (paying back) and eligible.

Financial lease guarantee is not granted

1. If the financial lessee requests to finance activities in the following sectors:

  • financial and payment services and insurance (activity codes according to Divisions 64, 65, 66 of the statistical classification of economic activities approved by an order of the Director General of the Department of Statistics under the Government of the Republic of Lithuania (NACE Rev. 2) (hereinafter referred to as NACE Rev. 2));
  • distilling, rectifying and blending of spirits (activity code in class 11.01 according to NACE Rev. 2);
  • wholesale of alcoholic beverages (activity code in subclass 46.34.10 according to NACE Rev. 2);
  • manufacture of weapons and ammunition and/or their retail sale in specialised stores (activity codes in group 25.4 and subclass 47.78.30 according to NACE Rev. 2);
  • manufacture and/or wholesale of tobacco products (all activity codes in Division 12 and class 46.35 according to NACE Rev. 2);
  • gambling and betting activities (all activity codes in Division 92 according to NACE Rev. 2);
  • agriculture (activity code in Division 0.1 according to NACE Rev. 2);
  • production and processing of agricultural products (activity code in groups 10.1, 10.3, 10.4, 10.5, 10.6, 10.7 and classes 10.81, 10.82 according to NACE Rev. 2):
  • forestry (activity code in Division 02 according to NACE Rev. 2);
  • fishery (activity code in groups 03.1 and 10.2 according to NACE Rev. 2);
  • aquaculture (activity code in group 03.2 according to NACE Rev. 2);
  • also in the areas listed in Article 1 of Regulation (EU) No. 1407/2013.

If the financial lessee carries out any of the above-listed non-eligible activities along with other – eligible – activities, it must ensure that the financial lease funds will not be used to finance the activities listed in this section. If the financial lessee is unable to ensure (separate) that the financial lease funds will not be used to finance the restricted activity, a guarantee shall not be granted.

2. Nor shall INVEGA’s financial lease guarantee be granted:

  • if the financial lessee and its beneficial owner, as it is defined in paragraph 14 of Article 2 of the Law of the Republic of Lithuania on the Prevention of Money Laundering and Terrorist Financing, or natural and legal persons for whose benefit the financial lease funds will be used, are subject to sanctions (any trade, economic or financial sanctions, embargoes or other restrictive measures), which are imposed, applied or administered by the United Nations Security Council, the European Union, the Republic of Lithuania, the Government of the United States of America (including the Office of Foreign Assets Control of the U.S. Department of the Treasury), the United Kingdom of Great Britain and Northern Ireland;
  • if the financial lessee does not meet minimal criteria for reliable taxpayers laid down in Article 401 of the Law of the Republic of Lithuania on Tax Administration. Compliance with this requirement shall be determined according to the information made public by the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania on its website at https://www.vmi.lt/evmi/mokesciu-moketoju-informacija; 
  • if the financial lessee has not presented a set of financial statements for the past financial year to the state enterprise Centre of Registers where it is subject to such an obligation according to legal acts applicable to its activities;
  • if the financial lessee or its members are subject to the European Union sanctions in response to the war against Ukraine, as established in paragraph 33 of the Communication. Information on the sanctions imposed by the European Union on the Russian Federation and the Republic of Belarus is published on the website of the Ministry of Foreign Affairs of the Republic of Lithuania at www.urm.lt/sankcijos
Financial lease and financial lessee

In this case, financial lease is understood as a service when a financed asset, independently chosen by the financial lessee for financial lease, acquired by the financial lease company by the right of ownership, is transferred under the financial lease agreement to the financial lessee for use and management and, after the financial lessee fully settles accounts with the financial lease company, becomes the property of the financial lessee.

Guarantees are also provided for reverse financial lease transactions if new, unused manufacturing facilities and/or equipment were acquired by the financial lessee no earlier than within 6 months preceding the date of addressing INVEGA for the financial lease guarantee. In such a case, the maximum financial lease amount cannot exceed 90% of the asset acquisition value (net of VAT) and when INVEGA is applied to for a financial lease guarantee, documents confirming the manufacture (the novelty of the equipment is evaluated at the time of its acquisition) and purchase of the manufacturing facilities and/or equipment must also be additionally presented.

INVEGA guarantees are not granted for other services provided by financial lease companies (operational lease, etc.).

The financial lessee must be:

  • a SME or a large enterprise;
  • registered in the Register of Legal Entities or registered as a taxpayer in the Republic of Lithuania;
  • not in bankruptcy, not under restructuring and not in distress as defined in Article 4(6)(a) of Commission Regulation (EU) No. 1407/2013;
  • must have entered into a financial lease agreement with a financial lease company for financial leasing of assets;
  • pay the down instalment of at least 10% of the price of the financially leased asset for the financially leased asset.
Main conditions for obtaining a financial lease guarantee, procedure of granting

The financial lease guarantee amount must not exceed 90% of the financial lease amount.

The maximum guaranteed amount for a financial lease transaction per beneficiary:

  • 15% of the average annual turnover of the financial lessee in the last 3 years;
    or
  • 50% of expenses for energy during 12 months preceding the month of filing the application.

If one financial lessee is to be granted and/or has already been granted several aid guarantees, the total amount of aid guarantees, with regard to the actual amounts (balances) of liabilities under granted aid guarantees, may not exceed EUR 10,000,000.

Financial lease guarantee granting procedure

INVEGA is to examine applications received from financial lease companies for a financial lease guarantee no later than within 20 calendar days after the date of receipt of the required documents.

Decisions on guarantees are taken by INVEGA management bodies or their authorised persons under the procedure set in the Articles of Association of INVEGA and other INVEGA’s legal acts and/or documents that regulate issue of guarantees.

The head of INVEGA or an employee of INVEGA authorised by him shall sign a written guarantee no later than within 3 (three) business days after receipt of a financial lease agreement and payment of the guarantee fee.

Assets that can be subject to financial lease

New and used manufacturing facilities and/or equipment:

  • equipment, installations, apparatuses, machine tools, facilities, devices, mechanisms, technological lines, vehicles and other special equipment.
  • a separable part of buildings, premises and/or other real property;
  • tangible assets or tangible assets along with related intangible assets (with software, licence, etc.).

Assets must be intended for: performance of activities of a financial lessee and increasing its productivity (when assets older than 5 years are acquired, the financial lessee must present a substantiation (a business plan or an explanation of free form) to the company how the acquired assets will contribute to increasing the financial lessee's productivity).

Assets may not be:

  • components, except for cases when they are acquired along with manufacturing facilities and equipment;
  • ships intended to carry out activities in the fishery and aquaculture sectors;
  • railway and tram locomotives or rolling stock, aircraft, cars (excluding commercial vehicles);
  • manufacturing facilities and/or equipment when they are acquired from persons related to the financial lessee (its members, parent companies, subsidiaries, etc.);
  • used for personal needs of natural persons related with the financial lessee.

Valuation of assets subject to financial lease:

Optional if one acquires new (unused) manufacturing facilities and/or equipment, produced no earlier than 12 months before conclusion of the financial lease agreement that have not been used for their intended purpose.

Valuation by independent property valuators or the financial lease company (at one’s discretion) is mandatory if case of acquisition of manufacturing facilities and/or equipment not older than 5 years.

Valuation by independent property valuators is mandatory if:

  • one acquires manufacturing facilities and/or equipment older than 5 years;
  • one acquires manufacturing facilities and/or equipment from the financial lessor or persons related to it (i.e. when the seller of the assets subject to the financial lease is the financial lessor or a company of the group to which the financial lessor belongs).

Valuation must be made no earlier than 6 months before applying to INVEGA for a financial lease guarantee.

Financial lease guarantee fee

The financial lessee shall pay a fee to INVEGA for the financial lease guarantee.

The guarantee fee shall be determined with regard to the guarantee amount and duration of use of the guarantee, i.e. a fixed base applies for the first year of use (1–12 months) and an annual additional fee for each following year. The fixed base will depend on the age of the financial lessee.

Pricing:

Segment Fixed Base Annual Additional Fee
SME up to 3 years old* 1 % 0.30 %
SME more than 3 years old 1.50 % 0.20 %
Large enterprises up to 3 years old 2 % 0.55 %
Large enterprises more than 3 years old 1.50 % 0.65 %

* Reference date for calculation of the age of an enterprise is the date of receipt of the application for a guarantee.

Examples of guarantee pricing

1) SME financial lessee is up to 3 years old, the financial lease period is 4 years, the guarantee period is 4 years.
Guarantee price = Fixed base + (n * Annual additional fee)
Guarantee price = 1% + (3 * 0.3%) = 1.9%

2) Large enterprise financial lessee is more than 3 years old, the financial lease period is 5 years, the guarantee period is 5 years.
Guarantee price = Fixed base + (n * Annual additional fee)
Guarantee price = 1.5% + (4 * 0.65%) = 4.1%