Guarantees for Financial Lease (Leasing)

What are the benefits?

Economic operators applying for funding for business development or business continuity often encounter collateral-related issues: the collateral offered can be insufficient or unattractive. The individual guarantee service helps to resolve these issues by securing repayment of a certain part of the borrowed funds in the event of the borrower‘s default.

Individual guarantees help businesses in cases of insufficient or unattractive collateral and enable them to obtain more favourable terms of financing. Such guarantees can be provided for financial lease (leasing) services intended for the purchased of production equipment and installations and agricultural and forestry machinery.

Financial lease (leasing) guarantees are provided to financial institutions for the leasing services provided to economic operators whose activities are related to agriculture, forestry, food sector, rural development or fisheries. The economic operator must have registered an agricultural holding (except for those engaged in fisheries).

Who is eligible?

Financial leasing guarantees are provided to financial institutions for the leasing services provided to economic operators whose activities are related to agriculture, forestry, food sector, rural development or fisheries. The economic operator must have registered an agricultural holding (except for those engaged in fisheries).

How much?

The maximum amount of the price of the asset financed by leasing: EUR 1.16 million.

Leasing companies are guaranteed payment of 80 % of the unrecovered part of the asset financed under a leasing agreement. The guarantees are only provided for the leasing services the purpose of which is to finance commercially viable and creditable projects implemented by economic operators that are not in difficulty.

How does it work?

The amount of the guarantee liability to a financial institution is calculated after the financial institution has terminated the financing agreement and has submitted evidence that assets and/or property rights were mortgaged/pledged under the financing agreement and/or claims under the bills issued to the financial institution were settled and/or any unsold assets were transferred to the financial institution according to the procedure prescribed by the law.

Management bodies of the Company have the right to decide to pay up to 80% of the difference between the unrepaid financed amount and the amount recovered from the entity by the financial institution upon realisation of the collateral/security.

Where a note has been issued for the benefit of the financial institution, the latter acquires the right of claim under the guarantee provided by the Company after fulfilling the requirements set in the Company‘s Regulations for the Provision of Individual Guarantees and after submitting to the Company a certificate issued by a bailiff of the Republic of Lithuania to the effect that, as of the date of the certificate and for at least 6 calendar months preceding that date, the note issuer does not have, or no longer has, any assets realisable in order to settle the financial institution‘s claim under the note.

Leasing guarantees are provided to:

Purchase of production equipment and installations;
Purchase of agricultural and forestry machinery.

Leasing guarantees
Purpose of leasing	Production equipment, installations, agricultural and forestry machinery.
Leasing term	Unlimited
Max. amount of the asset price financed by leasing	EUR 1.16 million
Max. total amount of leasing guarantees per economic operator	EUR 1.16 million
Guarantee fee* (on the amount guaranteed)	5.3 % - 7.0 % (80 % is compensated)
Charge for the extension of the guarantee term	0.3 % for each year of extension of the time limit for the repayment of the price of the asset financed by leasing. The charge is calculated on the part of the outstanding asset price.

* The amount of the guarantee fee depends on project risks; financing amount, term and purpose; financial reliability of the client etc.

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For those applying for financial lease (leasing) services with a guarantee: Guarantee Application (leasing services)

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