On 1 January 2016, a resolution of the Government of the Republic of Lithuania entered into effect enabling UAB Investicijų ir verslo garantijos (“Invega”) to provide loan guarantees to credit institutions for investment and working capital loans issued to large companies. Guarantees will be provided for loans of large companies issued by credit institutions which have signed cooperation agreements with Invega.
Guarantees will help large companies to mitigate their business risks and access the necessary funding which would be unavailable to them without state support. Guarantees to credit institutions for loans taken out by large companies will cover up to 80% of the principal amount.
“Small and medium-sized businesses have already felt the importance of such guarantees. We hope that this decision will also help large companies to have better access to external finance and enable them to grow both domestically and abroad,” Evaldas Gustas, Minister of Economy, says.
Large companies are already able to receive guarantees for loans issued by AB Šiaulių bankas, which is the first credit institution to have signed a cooperation agreement with Invega. Currently, other credit institutions are also in the process of signing cooperation agreements.
“We take pleasure in knowing that this agreement will give access to the bank’s valuable experience and make it possible to issue credits to large companies as well, which will contribute to the growth of the bank’s portfolio of guaranteed loans and broaden cooperation with businesses adding a segment of large companies to the small and medium-sized business component,” Vytautas Sinius, Head of Administration at Šiaulių bankas, says.
The amount of an Invega guarantee for a loan to a large company will have to be up to EUR 1.5 million (EUR 750,000 for large road freight companies) when the guarantee period is up to 5 years. If the guarantee period is more than 5 years but less than 10 years, the guarantee amount will have to be up to EUR 750,000 (EUR 350,000 for large road freight companies) (thresholds applicable to de minimis aid).
Invega obligations for the loans issued to large companies under guarantees to credit institutions may not exceed EUR 20 million at any given time. Once this threshold is reached, no further guarantees for the loans of large companies will be issued by Invega.
A guarantee payment will be made at the request of a credit institution where bankruptcy or restructuring proceedings are initiated against a large company.
Information of the Ministry of Economy