What are the benefits?

Soft loans granted under the instrument Entrepreneurship Promotion Fund 2014–2020 financed by the European Social Fund (EPF2) provide natural persons or micro and small companies with favorable conditions to receive funding to start a business or develop an existing business operating for up to 1 year.

What companies are eligible?

Micro and small companies, natural persons working under the business license or self-employed whose status conforms to the SME status under the SME law.

Individuals who intend to set up a business and/or recently established entrepreneurs (up to 1 year since the entity’s registration).

What is the maximum amount?

The maximum loan amount is EUR 25,000. Loans will be provided for a maximum term of 120 months. The interest rate is 3-month EURIBOR (only for 10 per cent of the loan) + a fixed interest margin of 3 per cent (margin of the credit union).

In order to receive a loan in a credit union, a natural person must become a member of the credit union and a legal entity must be an associated member of the credit union. In compliance with the Law on Credit Unions of the Republic of Lithuania, a member of the credit union must:

  • pay a one-time non-refundable initial membership fee, the amount of which is established by the board of the credit union. In the practice of credit unions, the amount of the initial membership fee is between EUR 0 and EUR 100. In order to find out the amount of the initial membership fee, one needs to apply to the credit union in which he/she intends to be a member.
  • hold the main share in the credit union which would be at least of the size specified by the Law on Credit Unions of the Republic of Lithuania and the articles of association of the credit union. Pursuant to the provisions of the Law, the amount of the share contribution may not be lower than the main share by more than EUR 30; however, the credit union can establish a different amount in its articles of association. The share contribution paid for the main share may be refunded only after the membership in the credit union has expired.

Credit unions apply additional share contributions related to the credit amount. The amount of additional share contribution is determined by the board of the credit union on a case-per-case basis, having regard to the risks of the loan, its guarantees, etc. and seeking to ensure and not to violate any norms restricting the activities of the credit union. In practice, the amount of additional share contribution varies from 0 to 20 per cent of the credit amount. The share contribution paid for the additional share may be refunded even before the membership in the credit union has expired. The refunding procedure is carried out pursuant to the provisions of Article 14 of the Law on Credit Unions.

The current amount of shares applicable in credit unions: credit union

The specification of the project funding conditions is available here >>

How does it work?

Applications are required to be submitted to the credit unions, members of the Lithuanian Central Credit Union (LCCU). Document forms are available on the website of the Lithuanian Central Credit Union (LCCU). In need of assistance with the business plan, the applicant can register for a consultation. In case the guarantee lack, the credit union can apply to INVEGA for in individual guarantee.

In addition, borrowers of soft loans under the EPF2 can benefit from global grant instrument Business Start-up Subsidies and receive a compensation of labour costs for every employee working under an employment contract.

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Atnaujinta 2019-12-23