New in Lithuania: INVEGA will grant direct loans "Perspektyva" to businesses that are developing innovative products
National development agency Investicijų ir verslo garantijos (INVEGA) starts granting businesses direct loans Perspektyva, which are intended for industrial research and/or experimental development and innovative activities aimed at exploitation of research results and inventions in order to develop and upgrade the production of products and provision of services. For creation of innovative products, businesses will be able to get a loan of up to EUR 1 million at extremely low interest rates. And if the financed project is implemented properly, up to 20% of the loan will be non-refundable.
Industrial research and experimental development and creation of innovative products or services cost a lot, therefore, investments are necessary for the breakthrough in business growth and competitive advantage in the market. However, it is almost impossible to get financing today, when, for example, a product is produced solely for demonstration and validation purposes.
Through INVEGA, the state offers a niche instrument that will ensure funding for Lithuanian companies that are developing innovative products, technologies or prototypes in the laboratory environment and are carrying out scientific and experimental research.
“Through INVEGA, the state offers a niche instrument that will ensure funding for Lithuanian companies that are developing innovative products, technologies or prototypes in the laboratory environment and are carrying out scientific and experimental research,” says Kęstutis Motiejūnas, CEO of INVEGA. “Granting of Perspektyva loans is a novelty in Lithuania, as until now our innovative product developers were offered only subsidies. Subsidies will not be completely eliminated in this case, either – after the receipt of a cheap loan and proper implementation of the project, up to 20% of the loan amount outstanding can be assigned as a subsidy.”
Perspektyva is intended for Lithuanian enterprises of all sizes. An innovative product, service or technology will have to be placed on the market no later than within 5 years after the signing of the loan agreement. An enterprise will have to participate in the implementation of the project with its own funds investing at least 20% of the required funds, which may be the borrower’s or private lender’s money. Also, in order to obtain a loan, the business will have to offer securities for repayment of the loan, acceptable to INVEGA.
According to the CEO of INVEGA, loans under the instrument Perspektyva will be provided for a period of up to 10 years and one borrower can be granted several loans, but the total amount of loans under this instrument, granted to one borrower, cannot exceed EUR 1 million. Unlike other loans, these loans will be disbursed in portions, according to the stages of the project. Besides, industrial research or experimental development is mandatory in the project.
Investments made by use of the instrument Perspektyva funds will be aimed primarily at supporting cooperation between business and science.
“At the beginning of the development of an innovative product or service, there is no need for large production capacity, but one needs access to scientists and technicians, equipment, laboratories or patents. Therefore, investments made by use of the instrument Perspektyva funds will be aimed primarily at supporting cooperation between business and science,” K. Motiejūnas says. Therefore, in the loans assessment process, in addition to INVEGA experts, the experts of the Innovation Agency will also be involved, who will have to prepare a conclusion on the conformity of the project activities to industrial research and experimental development activities, as well as on the risks of the project activities.
K. Motiejūnas notes that in case of Perspektyva loans, state aid will be granted under two regulations. Loans to SMEs and large enterprises, when financed activities include industrial research and/or experimental development, will be able to be granted in accordance with the provisions of the Block Exemption Regulation. In the meantime, SMEs, carrying out industrial research, experimental development and innovative activities, will be able to obtain financing in accordance with the provisions of the de minimis Regulation.
Business representatives can already apply for a loan contacting INVEGA by e-mail email@example.com. Up to EUR 20 million from the Innovation Promotion Fund controlled by INVEGA will be allocated for the implementation of the instrument Perspektyva in total, but if the instrument is in demand, the budget allocated to it will be reviewed.
More information about the conditions of the instrument and the documents to be submitted is available on INVEGA’s website.