More than EUR 450 million offered to business this year through INVEGA measures – financial state aid continues

More than EUR 450 million have been allocated to businesses this year through state aid measures administered by the national development institution Investment and Business Guarantees (INVEGA). Most of the funds, i.e. about EUR 340 mln, have been appropriated to implement financial instruments designed to help businesses cope with the effects of the COVID-19 pandemic. Meanwhile, the amount of long-term business promotion instruments granted amounted to EUR 110 million. INVEGA instruments can continue to be used by companies and entrepreneurs looking for sources of financing to ensure development or operational stability.

“As the pandemic continues and quarantine requirements become stricter, we want to reassure and encourage businesses seeking additional funding – they can continue to apply for state aid to INVEGA or to financial intermediaries cooperating with INVEGA. We continue to implement measures to mitigate the effects of the pandemic, focusing on the different business needs and the most affected sectors. Conventional financial instruments, such as loans, guarantees, venture capital investments, are also available as long-term business promotion instruments. We are closely monitoring the changing situation and, using the experience, technological and human resources accumulated during this difficult period, we are ready to implement new Government decisions or possible changes in the business support package,” said Kęstutis Motiejūnas, CEO at INVEGA.

Reserves for “anti-COVID” financial instruments

According to the head of INVEGA, the largest share of the funds appropriated this year comprised business assistance through the measures launched during the pandemic – EUR 340 million have been used for this purpose up to now. “Despite the impressive volumes of business assistance provided, the assistance continues," added Motiejūnas.

INVEGA points out that a business that has assessed its situation and is looking for suitable sources of financing can use the crowdfunding loans Avietė, which can offer another EUR 6.2 million of state funds. Those wishing to obtain loans from financial institutions or to restructure the existing ones are invited to consider the measure Portfolio Guarantees for Loans 2. There are still EUR 400 million left to use for these guarantees, and the business need to apply to one of the 17 financial intermediaries that have signed agreements with INVEGA for the implementation of this measure.

It is planned to continue providing financial assistance to the tourism sector, which is facing a particularly severe challenges due to the pandemic. The head of INVEGA encourages companies in this sector to apply for loans to tourism and accommodation service providers and guarantees to ensure the fulfilment of obligations of tour operators.

It has been noted that the demand for loans for interest compensation also remains. A total of nearly EUR 57 million is earmarked for the measure, and currently the positive decisions made with regard to interest compensation comprise EUR 19 million. Entrepreneurs can apply for both 100 % compensation, which is applied if during the emergency situation the payments of available loans or leasing were postponed for a maximum of 6 months, as well as for interest compensation for long-term loans aimed at business development up to 95 % for a period of up to 36 months.

In addition, companies can still apply for partial lease fee compensation until 30 November. More than EUR 31 million of the EUR 40 million allocated for the implementation of the measure have already been appropriated.

“Considerations are often heard about what form of state aid to business is the most effective – the provision of subsidies or soft loans and other financial instruments. Can public loans be considered aid altogether – after all, loans need to be repaid. We believe that both types of assistance are necessary because they respond to different needs and pursue different goals. INVEGA's main mission as a national development institution is to help businesses solve the challenges of temporary liquidity during the pandemic period. Therefore, the lion’s share of the aid provided by INVEGA reached the business thanks to loans, guarantees and other financial instruments,” said Motiejūnas.

Long-term business promotion financial instruments

According to Motiejūnas, business representatives can apply not only for “anti-COVID” financial instruments. Long-term business promotion financial instruments are regularly provided to businesses that lack financing sources – INVEGA individual guarantees, targeted export credit guarantees, portfolio guarantees for loans, leasing or factoring, soft loans and loans from the new incentive financial instrument “Alternative”, and various INVEGA-financed venture capital instruments. Over EUR 110 million has already reached businesses this year using these financial instruments.

“Undoubtedly, targeted financial measures to mitigate the effects of "the pandemic are a priority aid. However, the long-term business promotion financial instruments available beside them can also provide business with stability in the face of a constantly changing situation and lay the foundations for long-term development of activities,” stated Motiejūnas. “We aim to present the opportunities that are opening up as clearly as possible to businesses interested in these sources of financing, and to help them find the right solution,” he added.