The national development agency Investicijų ir Verslo Garantijos (INVEGA) paid out to businesses more than EUR 500,000 of interest compensations according to applications received in April and based on more than 1,800 decisions. Of the total amount of the provided compensations, more than EUR 16,000 was allocated to companies whose loan payments had been postponed due to the COVID-19 pandemic.
Very small, small, medium-sized businesses or entrepreneurs that qualify as small and medium-sized enterprises (SMEs) may avail of State-provided support, i.e. compensation of interest, through INVEGA. INVEGA provides interest compensations in the following three instances: 1) based on applications of SMEs whose operations have not been suspended and compensation of interest has taken place under standard conditions; 2) based on applications of SMEs who had to request that financial institutions postpone loan payments; and 3) based on applications of SMEs engaged in road freight transportation, have a valid loan agreement intended for the acquisition of freight vehicles and, in the time period between 16 March 2020 and 31 December 2020, sign with the relevant financial institution an arrangement regarding postponement of loan or lease agreement payments. In the first instance, compensation may be provided for up to 95% of interest, and in the second and third instances 100% of interest may be compensated for the loan payment postponement period. Compensations of interest no doubt lighten the financial burden of businesses.
“The demand for both full and partial compensation of interest continues to grow,” said Kęstutis Motiejūnas, head of INVEGA. “By now, we have concluded agreements regarding compensation of interest of EUR 5.55 million. Since the end of April, this amount has increased by approximately EUR 1.5 million. Interest compensation is one of our measures most requested by businesses.”
Mr. Motiejūnas noted that earlier transport companies whose main activity is road freight transport and which acquired freight vehicles using loan or lease funds were unable to avail of compensations of interest. But, starting from 15 May 2020, these companies may also apply for compensation of 100% of interest. Interest on loans in respect of which payments are postponed may be compensated for up to 6 months, in the time period between 16 March 2020 and 31 December 2020.
Mr. Motiejūnas also reminded that SMEs that apply for compensation of 95% of interest and that have valid loan agreement signed starting from 1 October 2015 may apply for compensation of interest until 30 June 2020. If an application is submitted to INVEGA on 1 July 2020 or later, the loan agreement must be signed not earlier than two month before the date the application is submitted to INVEGA. In this case, compensation of interest will be provided for a longer term, i.e. up to 36 months.
Further information about the conditions of interest compensation is available on INVEGA’s website, in the Compensation of interest section.
Applications for interest compensation must be submitted via the electronic application system and signed with a mobile signature. An application may be submitted on behalf of a company by the head of administration of the company or his/her authorised representative. Further information about the filling out of applications is also available on INVEGA’s website.