Individual guarantees during the period of Russia‘s aggression against Ukraine

What are the benefits?

With the aim to reduce the adverse impact of Russia‘s aggression against Ukraine on the economy, until 30 June 2023 individual guarantees are provided to financial institutions in respect of loans and leasing services provided to economic operators to support their economic activities. Individual guarantees are provided under Communication from the Commission of 24 March 2022 ‘Temporary Crisis Framework for State Aid Measures to support the economy following the aggression against Ukraine by Russia‘ (the ‘Communication‘).

Who is eligible?

The individual guarantees are provided to economic operators that encountered, in the period from 1 February 2022 until the filing of the application for the individual guarantee, liquidity problems, and one of the following conditions is fulfilled:

The value of the entity‘s quick ratio (critical liquidity ratio) (Current Assets – Inventories / Current Liabilities) is below 1 at the end of the reporting quarter prior to the filing of the application for the individual guarantee;
The entity‘s turnover has dropped by more than 10%. The entity‘s average monthly sales income from activities related to agriculture, production and processing of agricultural products, forestry, rural development, aquaculture and fisheries or from support activities to agriculture and post-harvest crop activities, in the period from 1 February 2022 until the date of filing the individual guarantee application to the Company, is compared to the average monthly sales income in 2021.

Žemės ūkio paskolų garantijų fondas UAB (Agricultural Credit Guarantee Fund, a private company) provides individual guarantees to economic operators whose activities are related to agriculture, production and processing of agricultural products, forestry, rural development, aquaculture and fisheries.

How does it work?

You can receive this financial assistance if your business is experiencing difficulties and you need a new loan or a new leasing service for the following purposes:

Supplementing the entity‘s working capital incl. wages and related taxes and contributions;
Financing of investments;
Purchase of production equipment and/or installations.

How much?

An economic operator that meets conditions of the instrument can be provided with an individual guarantee for up to EUR 5 million for a period of up to 6 years, when one of the following conditions is fulfilled:

The loan or leasing amount, or a part thereof, must not exceed 15% of the entity‘s average monthly sales income from activities eligible for assistance, support activities to agriculture and post-harvest crop activities during the past three full reporting periods;
The loan or leasing amount, or a part thereof, must not exceed 50% of expenses for natural gas and electricity during 12 months preceding the month in which the application for the individual guarantee was filed.

Individual guarantees may be provided to financial institutions to guarantee:

Repayment of up to 90% of unrecovered loan and of the price set in the leasing agreement, or a part thereof, to financial institutions;
Repayment of up to 35% of unrecovered loan and of the price set in the leasing agreement, or a part thereof, to financial institutions.

You can use the calculator to estimate the guarantee fee amount

Terms and conditions

An economic operator meeting the criteria of the instrument can be provided an individual guarantee for the period of up to 6 years. The individual guarantees are provided until 30 June 2023.

Invidual guarantees are provided to economic operators that:

Fulfil the conditions of type of activities and liquidity;
Require the loan or the financial lease (leasing) service for the specified purposes;
The loan or the financial lease (leasing) service meets the set financing requirements;
The individual guarantee is provided to loan or leasing agreements with the term of up to 6 years (72 months);
The individual guarantee is provided on these conditions until 30 June 2023;
The economic entity must submit all requisite documents and pay the guarantee contribution;
Provision of the individual guarantees is subject to the ACGF Regulations on the Provision of Individual Guarantees and Resolution of the Government on the ACGF (links to the documents are provided below).
The individual guarantee provided under this instrument constitutes state aid;
No individual guarantees will be provided if the beneficiary or its members are subject to the EU sanctions; if, as of the moment of submission of the application for the individual guarantee, the economic operator is going bankrupt and/or is under liquidation; if the economic operator is defaulting on its obligations under other ACGF instruments and/or the agreement has been terminated; the economic operator received aid which has been recognised as unlawful and incompatible with the internal market;
No individual guarantees will be provided to the financial institution for the loans under Section 2.3 ‘Liquidity support in the form of subsidised loan‘ of the Communication;
Where individual guarantees are provided under this instrument to financial institutions and loans are made under Section 2.3 ‘Liquidity support in the form of subsidised loan‘ of the Communication, the sum of the amounts of the loans and the prices under leasing agreements, or parts of such prices, may not exceed the limits set in p. 20 of the ACGF Regulations.

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Apply to one of the financial institutions on the list for a loan or leasing services. On taking a decision on the granting of funding, the financial institution will apply to INVEGA for the guarantee.

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