The national development agency Investicijų ir Verslo Garantijos (INVEGA) has paid EUR 551,000 in interest compensation to companies on the basis of 1751 approved applications. In total, more than EUR 4m in business loan interest has been compensated by 20 April. Most of the applicants were small businesses who needed urgent small-scale assistance.
The beneficiaries of interest compensations were companies in the entertainment, event technical services, catering, accommodation and beauty services sectors. The activities of companies operating in these and other sectors were directly affected by the nationwide quarantine in Lithuania as they were either completely prohibited or severely restricted. Small and medium-sized enterprises lost orders, faced stalling settlements and were forced to ask financial institutions to defer the repayment of loans. The interest compensation scheme helps ease the financial burden on such companies, as indicated by the increasing number of applications for this INVEGA measure.
“I want to emphasize that we have just completed another round of interest compensation payments,” said Kęstutis Motiejūnas, INVEGA CEO. “We paid the monthly compensations to those who had applied back in March. We are constantly receiving new applications and we can already see that the amount of compensations will increase tenfold,” he added.
He said that since the beginning of April INVEGA had received another 652 applications with a total value of about EUR 7m.
Applications for interest reimbursement are submitted via the INVEGA electronic application system by using the mobile signature. An application may be submitted on behalf of the company by its director or an authorized person. In order to facilitate the submission of applications, INVEGA specialists have created an instructional video that shows the process step by steps. Additional information on how to fill in application can also be found on the INVEGA website.
Commenting on the interest compensation process Mr Motiejūnas pointed out that, even though they are relatively small, the compensation payments have a critical impact on some businesses.
“I keep hearing that billions of euro in state aid are being promised, but in fact only a small part of this money actually reaches businesses,” Mr Motiejūnas said. “It is undeniable that the practical implementation of political decisions takes time. But the very first payments are especially significant because they save the smallest of companies. Half a million euro is a small fraction of the billion-dollar package, but for more than a thousand companies, it was a contribution that keeps them going,” he said.
As reported earlier, the government has allocated EUR 23 million in order to fully compensate for the SME’s interest in cases where loans or financial lease (leasing) payments have been deferred from 16 March 2020 onwards due to the coronavirus pandemic. Interest on deferred loan and financial leasing payments is reimbursed for investment and working capital loans that meet the criteria for this measure.