Individual Guarantees for Loans
What are the benefits?
Individual guarantees for loans, provided by INVEGA, offer solutions to unattractive or insufficient conditions and facilitate the access to the funding sources.
What companies are eligible?
Business start-ups, small and medium-sized enterprises, large companies.
What is the maximum amount?
The maximum amount of the guarantee may not exceed EUR 5 000 000, in the case the subjects acitvity is road freight transport for hire and reward - guarantee may not exceed - EUR 750 000 EUR.
Minimum proportion of own funds – 20 percent, intensity of guarantee 80 percent depending on the age of the company.
How does it work?
In order to use this financial instrument, subject is required to apply directly to the financial institution and agree on the amount of funding. The financial institution will assess the project, ability to repay loan and calculate the amount of guarantee needed. Subsequently, the financial institution will submit a request for a guarantee on a loan as well as other related documents to INVEGA.
Guarantees are provided for loans intended for:
- tangible investments – purchase, construction, repairs or reconstruction of fixed assets;
- intangible investments – technology takeover acquiring patents, licenses or other technical know-how not subject to patenting;
- working capital;
- refinancing of investments from enterprise funds (no earlier than within last 6 months before the date of receipt and registration of the guarantee application). In such case the guarantee application must be accompanied by documents supporting expenses and payment.
- “Achemos” credit union
- Akademinė credit union
- Alytus credit union
- Anykščiai credit union
- Aukštaitija credit union
- Biržai credit union
- Centro credit union
- Druskininkai credit union
- Gyventojų ir smulkaus verslo credit union
- Grigiškiai credit union
- Grinkiškis credit union
- Ignalina credit union
- Joniškis credit union
- Jurbarkas kredito unija
- Kaišiadoriai credit union
- Cooperative Society ARKU credit union
- Kaunas credit union
- Kėdainiai region credit union
- Klaipėda credit union
- Klausučiai credit union
- LTL credit union
- Credit union “Saulėgrąža”
- Credit union “Zanavykų bankelis”
- Credit union “Žemdirbio gerovė”
- Credit union “Gargždų taupa”
- Credit union “Jonavos žemė”
- Credit union “Sūduvos parama”
- Home credit union
- Credit union “Tikroji viltis”
- Credit union “Vievio taupa”
- Kretinga credit union
- Credit union “Kupiškėnų taupa”
- Credit union”Germanto lobis”
- Credit union “Mano unija”
- Credit union “Mėmelio taupomoji kasa”
- Credit union “Moterų taupa”
- Credit union “Magnus”
- Credit union “Prienų taupa”
- Credit union “Skuodo bankelis”
- Širvintai credit union
- Vilkaviškis credit union
- Kelmė credit union
- Mažeikiai credit union
- Naftininkai credit union
- Pagėgiai credit union
- Pakruojis farmers credit union
- Palanga credit union
- Panevėžys credit union
- Pareigūnai credit union
- Pasvalys credit union
- Plungė credit union
- Radviliškis credit union
- Raseiniai credit union
- Rato credit union
- Rokiškis credit union
- Seda credit union
- Šilalė credit union
- Šilutė credit union
- Tauragė credit union
- Trakai credit union
- Ukmergė ūkininkų credit union
- Utena credit union
- Varėna credit union
- Vilnius credit union
INVEGA does not provide guarantees for loans:
1. If the borrower requests to finance activities in the following sectors:
- financial and payment services, insurance (activity codes according to Divisions 64, 65, 66 of the statistical classification of economic activities approved by an order of the Director General of the Department of Statistics under the Government of the Republic of Lithuania (NACE Rev. 2) (hereinafter referred to as NACE Rev. 2);
- distilling, rectifying and blending of spirits (activity code in class 11.01 according to NACE Rev. 2);
- wholesale of alcoholic beverages (activity code in subclass 46.34.10 according to NACE Rev. 2);
- specialized retail trade of weapons and ammunition (activity code in subclass 47.78.30 according to NACE Rev. 2);
- manufacture and/or wholesale of tobacco products (all activity codes in Division 12 and class 46.35 according to NACE Rev. 2);
- gambling and betting activities (all activity codes in Division 92 according to NACE Rev. 2);
- real estate transactions (all activity codes in groups 68.1–68.3 according to NACE Rev. 2);
- as well as in the sectors listed in Article 1 of Regulation (EU) No 1407/2013.
If the borrower carries out any of the above-listed non-eligible activities along with other – eligible – activities, it must ensure that the funds of the guaranteed loan will not be used to finance activities listed in this section. If the borrower is unable to ensure (separate) that the funds of the guaranteed loan will not be used to finance the restricted activity, a guarantee shall not be granted.
2. When loan funds are used to pursue one of the following objectives:
- to refinance the borrower's obligations to financial institutions and other natural and legal persons, except where the guarantee is granted for refinancing investments paid at the expense of the borrower no earlier than within 6 months preceding the date of receipt of the application for a guarantee;
- to acquire financial assets;
- to construct, acquire, repair or reconstruct of immovable property in order to sell it or otherwise transfer it to other natural or legal persons, rather than using it in the activities of the borrower and/or undertakings related to it, which together are to be regarded a single undertaking in accordance with Article 2 (2) of Regulation (EU) No. 1407/2013;
- where more than 40 per cent of the immovable property acquired with the funds of the loan will be rented to other natural or legal persons who, together with the borrower, are not to be considered as a single undertaking in accordance with the Article 2(2) of Regulation (EU) No. 1407/2013. This limitation does not apply when the borrower provides hotel and/or other short-term accommodation services, carries out workplace rental activities or engages in storage activities;
- to finance the acquisition of assets that would not be intended for the borrower's activities;
- to finance investments carried out outside the territory of the Republic of Lithuania;
- to make payments to the borrower's participants;
- to re-lend loan funds to other natural or legal persons;
- financing the acquisition of road freight vehicles for freight companies.
3. Also, INVEGA does not grant guarantees where:
- the borrower and its beneficial owner, as it is defined in paragraph 14 of Article 2 of the Law of the Republic of Lithuania on Prevention of Money Laundering and Terrorist Financing, or the natural and legal persons for whose benefit the funds of the loan will be used, are subject to sanctions (any trade, economic or financial sanctions, embargoes or other restrictive measures) which are imposed, applied or administered by the United Nations Security Council, the European Union, the Republic of Lithuania, the Government of the United States of America (including the Office of Foreign Assets Control of the US Department of the Treasury), the United Kingdom of Great Britain and Northern Ireland;
- the borrower does not meet minimal criteria of reliable taxpayers set out in Article 401 of the Law of the Republic of Lithuania on Tax Administration. Compliance with this requirement is assessed on the basis of the information published by the State Tax Inspectorate under the Ministry of Finance of the Republic of Lithuania at https://www.vmi.lt/evmi/mokesciu-moketoju-informacija;
- the borrower has not submitted a set of annual financial statements for the previous financial year to the state enterprise Centre of Registers, when such an obligation exists under the laws applicable to its activities.
Maximum guarantee amount for small and medium-sized businesses: EUR 5,000,000. Where there are multiple guarantees, the sum of outstanding guarantee amounts must not exceed EUR 10,000,000.
Guarantee amount can be up to 80 per cent of the loan amount. Minimum guarantee amount: EUR 5,000.
For acquisitions of immovable property, the maximum liability limit of INVEGA cannot be more than 50 per cent of the loan amount.
In case of a guarantee for an investment loan, fixed tangible assets acquired with the funds of the guaranteed loan shall be mortgaged to secure repayment of the guaranteed loan.
Subject to the consent of INVEGA, such tangible fixed assets acquired with the funds of the loan may not be mortgaged as collateral to secure the loan, when, in the view of the beneficiary of the guarantee provided by INVEGA, the assets acquired with the funds of the loan are not an appropriate method for securing the loan due to low liquidity of the assets, or where the borrower offers to secure the loan with a mortgage of other tangible fixed assets the value whereof is not lower than the value of the tangible fixed asset acquired with the funds of the loan.
The market / liquidation value of such tangible fixed assets shall be determined by the beneficiary of the INVEGA guarantee in accordance with the documented internal procedures of the beneficiary.
The minimum financial contribution of the borrower (a company and/or its shareholders, owners and other participants) must be at least 20 per cent of the price of the project:
- In the case of an investment loan, the borrower's minimum financial contribution to the investment project must be 20 per cent (excl. VAT); after granting the guaranteed loan, the borrower's equity ratio must be at least 0.1, based on the annual financial report of last year, or based on the last interim financial report;
- In the case of a working capital loan, the borrower shall be deemed to participate in the financing of the project with its own funds when, after granting the guaranteed loan, the borrower's equity ratio is at least 0.1, based on the last (annual or quarterly) balance sheet report. For the purpose of calculating the equity ratio, equity means capital, share premiums, revaluation reserves, reserves, retained earnings (losses).
Contributing own funds is not required if the borrower has been operating for less than 24 months, and the amount of the guarantee applied for is not in excess of EUR 50,000. After assessing the risks of individual projects, a portion of own funds may be required for their implementation, the size of which will depend on the perceived threats.
In exchange for the guarantee, the borrower should pay a one-off guarantee fee, payable before the issue of the guarantee.
The guarantee fee shall be determined based on the guarantee amount and the duration of the guarantee, i.e. a fixed base will be applied for the first year (months 1 to 12), and an additional annual premium will be applied for each following year.
The fixed base will depend on the age of the borrower: 1 per cent for companies aged less than 3 years*; 1 per cent for companies aged more than 3 years (in the case of a working capital loan) , 1.5 per cent for companies aged more than 3 years (in the case of an investment loan) .
* – the age of the company is calculated from the date of receiving the guarantee application.
The annual premium will amount to 0.2 per cent (in the case of an investment loan) and 0.4 per cent (in the case of a working capital loan) for each additional year (i.e. 0.2% / 0.4% for months 13 to 24, for months 25 to 36, etc.).
|Segment||Fixed base||Annual Premium|
|All SME companies aged less than 3 years||1%||
working capital 0.4%
|Working capital, 3 years or more||1%|
|Investment, 3 years or more||1,50%|
Examples of guarantee pricing
An SME aged more than 3 years is financing investments with a bank loan maturing in 4 years. It will repay the guaranteed portion of the loan within 3 years.
Guarantee fee = Fixed base + (n * Annual premium)
Guarantee fee = 1.5% + (2 * 0.2%) = 1.9%
An SME aged more than 3 years is borrowing to finance its working capital. The bank loan matures in 2 years, the guaranteed portion of the loan will be repaid within 18 months.
Guarantee fee = Fixed base + (n * Annual premium)
Guarantee fee = 1% + (1 * 0.4%) = 1.4%
Fee calculator can be used to calculate the estimated guarantee fee on a case-by-case basis.