Updated conditions of interest compensation by INVEGA
On 1 January 2021, the updated conditions of interest compensation established by the national development agency Investicijų ir Verslo Garantijos (INVEGA) came into effect. The updated specification of the conditions of this measure contains clearer definitions for consumers, the changed time limits for signing loan agreements, expanded possibilities of receiving interest compensation, etc. This measure is available to companies and entrepreneurs who further develop their business activities and seek to receive partial compensation of interest (95%) for a period of up to 36 months.
“I would like to draw your attention to the fact that, currently, compensation of interest is financed from the state budget, and this option can be exercised by the businesses that make loan payments or leasing instalments under the standard procedure”, says Kęstutis Motiejūnas, CEO of Invega. “We made some changes to the conditions of interest compensation in order to make this measure even more accessible to businesses.”
According to Kęstutis Motiejūnas, all SMEs receive compensation for up to 95 per cent and not more than 7 per cent of annual interest for a period not exceeding 36 months, irrespective of the region in which their business activities are carried out, for investment or financial lease (leasing) loans, and working capital loans, if the latter are granted under the measures administered by INVEGA, except for the cases referred to in the specification of the conditions.
Furthermore, it is noteworthy that, differently from the previous specification of the measure, the time limit for the signing of loan agreements has been revised and now SMEs which had signed the loan agreements no earlier than on 1 January 2020 can apply for compensation of up to 95 per cent of interest.
Another change of the conditions of the measure is that more flexibility is ensured in such cases where a loan consists of several portions with different purposes. In such case interest will be compensated only for the portion of the loan which is intended to finance the eligible expenses. In this case the portions of the loans must be distinguished in a loan agreement or in the amendment to the loan agreement in such a way that it would be possible to identify the purpose of the respective portion of the loan amount at the time of the disbursement of the loan, the repayment schedule of this portion and the rates of interest applicable to it.
Compensation of up to 95 per cent of interest will not be available in the case of loans for payable invoices (ASAP) granted directly by INVEGA due to the COVID-19 outbreak, loans to businesses most affected by COVID-19 and the incentive financial instrument “Loans to travel and catering service providers”. Moreover, INVEGA reminds that, since 1 December 2020 there has been no possibility to submit applications for compensation of 100% of interest for loans where the loan repayment or the lease payment has been postponed.