Wider financing opportunities to develop young enterprises and businesses developing projects of social impact

National Development Institution “Guarantees for Investments and Business” (lt. Investicijų ir verslo garantijos) (INVEGA) is starting a new financing instrument for loans “Startuok” financed by the European Regional Development Fund (instrument “Startuok”). The instrument is intended for all business that have been operating for less than 3 years or the enterprises implementing the projects of social impact that have been operating for less than 5 years. INVEGA is going to grant the loans up to 3 million euro for these projects. It is expected that instrument “Startuok” will help to increase the country’s competitiveness and to solve the social, economic problems of the society and those of environmental impact.

“Most of the research, including the ones carried out by the international organisations, confirm that the new businesses or businesses operating less than 3 years find it difficult to access traditional loans of market’s sponsors in the Lithuanian business financing market. Therefore, we are glad to be able to suggest new direct loans by INVEGA - “Startuok” – for such businesses. We hope that they will help the businessmen to develop and grow more rapidly,” – says INVEGA CEO, Mr. Kęstutis Motiejūnas.

The loans under instrument “Startuok” are intended for small and medium-sizes enterprises (SME) operating for less than 3 years or SMEs implementing the projects of social impact that have been operating for less than 5 years. The companies shall be considered to be implementing the projects of social impact if at least 30 percent of their employees belong to the socially vulnerable groups, or if at least 30 percent of annual income of the business received in the course of implementation of the projects of social impact are received from the economic activities that solve social problems. The discount of 30 percent will be also applied for the price (interest) of loans granted to the projects of social impact.

“The funds of INVEGA are the resources of all our taxpayers, thus, we endeavour at using them purposefully for efficient promotion of business creation and development and performance of activities that create national welfare,” – says Mr. K. Motiejūnas.

The instrument’s resources may be used to grant loans for investments or circulating assets, to start new activities or to reinforce or expand the present ones. The number of loans issued to one borrower shall not be limited. INVEGA is going to grant investment loans for the term up to 120 months, while the maximum amount available to one applicant will be 3 million euro. The loans of circulating assets will be granted for the term up to 36 months, while the maximum amount available to one applicant will be 200 000 euro.

In order to make this financial instrument effective and to have the financed business to borrow responsibly, the borrower is also expected to contribute to the project’s financing. Private sponsors may join, if needed. At least 20 percent of the project’s expenses financed by INVEGA have to be covered by private sponsors, where at least 10 percent of the project’s expenses have to be covered from the borrower’s funds.

K. Motiejūnas also notes that in order to avoid duplication with the existent State financing instruments, the loans “Startuok” cannot be used to finance micro and small enterprises operating for less than 1 year and applying for financing up to 25 000 euro. INVEGA is going to continue offering preferential loans under the financial tool “Entrepreneurship Promotion Fund 2014-2020 financed by the European Social Fund”.

The businesses that want to receive loan “Startuok” may apply now at https://startuokpaskolos.invega.lt.The loan contracts for “Startuok” financing may be signed until 30 June 2023. 20 million euro from the fund “Business Financing Fund from the European Regional Development Fund” were assigned to implement the financial instrument “Startuok”. If the loans are in high demand, it is planned to increase the amount of funds.