The Ministry of Economy and Innovation, the Ministry of Finance and Investicijų ir Verslo Garantijos UAB (INVEGA) have presented a package of measures to help companies deal with liquidity and financial problems caused by the COVID-19 crisis. More than EUR 1.1 billion is to be distributed through INVEGA instruments from the government’s financial package for Lithuanian businesses.
“Our goal is to ensure that financial aid instruments are as flexible, timely and widely accessible as possible, especially for those businesses most affected by COVID-19. More than a billion euro, which is to be distributed through INVEGA to businesses, will be a significant injection to mitigate the effects of the coronavirus,” said the acting minister of economy and innovation, Energy Minister Žygimantas Vaičiūnas.
In order to help small and medium-sized enterprises affected by COVID-19 and to reduce the burden of borrowing, 100 per cent interest compensation will be made available to businesses for the period of loan or leasing payment holidays (up to six months) regardless of the type of the financial institution, the type of lending transactions, the purpose of the loan and the type of the borrower’s activity. The frequency of paying the interest compensation has also been changed so monthly from quarterly. Interest compensation will be available for the period from the start of the nationwide quarantine on 16 March until the end of the year, which will mark the end of the loan holidays. The instrument will be launched at the end of this week.
Another important and highly valued instrument for businesses is loan guarantees. In addition to the EUR 356m already available under the government-approved plan of measures to boost the economy and mitigate the effects of COVID-19, an additional EUR 470m has been earmarked for INVEGA guarantees. The range of financial institutions that will provide loans, leasing or factoring with portfolio guarantees will also be expanded. These financial instruments will be provided to small and medium-sized as well as large enterprises that are experiencing difficulties due to the COVID-19 crisis. This instrument will launch next week.
“Given the situation with regard to COVID-19, INVEGA is currently intensively developing its existing instruments and rapidly preparing new ones to help support business liquidity. There is ongoing cooperation both with the ministries and financial market participants, who are fully involved in this process,” said INVEGA CEO Kęstutis Motiejūnas.
More than EUR 142m in soft loans is expected to be issued through INVEGA. Of these, EUR 50m will be provided to maintain liquidity in the worst-affected sectors, such as hospitality and restaurants. This instrument will be available starting from mid-April.
Almost EUR 145m of public funds may be invested in Lithuanian businesses through various INVEGA-funded venture capital instruments. Businesses are encouraged to apply to private or venture capital funds for these investments.
These INVEGA instruments will reach businesses through financial institutions (banks, leasing companies, credit unions, etc.), which will inform each company about the appropriate solutions and financing options.