Small and Medium-sized Enterprises (SMEs) are essential to driving innovation and economic growth, yet accessing financing can be challenging. ILTE (formerly INVEGA), a Lithuanian government-backed agency, plays a crucial role in helping SMEs overcome these hurdles by offering financial guarantees. These guarantees reduce the risk for lenders, enabling SMEs to secure loans that might otherwise be out of reach.
This article explores how ILTE guarantees work, the benefits they offer, and how SMEs can leverage these opportunities with the support of trusted partners like EMBank.
How ILTE (formerly INVEGA) Guarantees Work
ILTE guarantees reduce the risk for lenders by covering up to 80% of the loan amount, making it easier for SMEs to secure financing. These guarantees apply to a variety of financing options, including:
- Investment Loans: For purchasing property, expanding operations, or acquiring new machinery.
- Working Capital Loans: To cover daily operational costs.
- Credit Lines: Providing businesses with flexible access to funds when needed.
To qualify for an ILTE guarantee, businesses must meet the SME classification, including having fewer than 250 employees and generating less than €50 million in annual turnover.
The company must operate within eligible sectors, excluding industries such as agriculture or transportation, which may have separate aid structures.
How ILTE Enhances SME Growth
ILTE guarantees provide essential financial backing that allows SMEs to pursue growth and innovation. These guarantees are particularly effective for businesses looking to invest in long-term projects, and their flexible structure helps align financing with the business’s development goals.
Here’s how ILTE guarantees help enhance SME growth:
- Access to Financing for Large-Scale Projects: ILTE guarantees enable SMEs to secure loans for major investments, such as facility expansions, new equipment purchases, or entering new markets. This helps businesses scale their operations or modernize without requiring extensive upfront capital.
- Flexible Repayment Terms: ILTE-backed loans offer repayment terms of up to 10 years, giving businesses the flexibility to spread out their financial obligations. This long-term repayment period allows SMEs to manage cash flow more effectively, ensuring they can cover operational expenses while pursuing significant projects.
- Alignment with Long-Term Growth Plans: The extended repayment terms make these loans ideal for businesses that need to synchronize loan repayments with their revenue-generating projects. SMEs can confidently invest in large-scale initiatives, knowing that their repayment schedules are aligned with their business cycles.
- Improved Loan Terms: With the reduced risk ILTE provides to lenders, SMEs often secure loans at better interest rates and more favourable conditions. This lowers the cost of borrowing, allowing businesses to allocate resources more effectively toward growth.
- Support for Innovation and Technological Upgrades: SMEs can use ILTE guarantees to finance innovations and technological advancements, helping them stay competitive. From R&D to upgrading production processes, these guarantees provide the financial support needed for transformative projects.
By combining access to larger loans, flexible repayment terms, and improved borrowing conditions, ILTE guarantees enable SMEs to pursue ambitious growth strategies with greater financial confidence.
Eligibility and Application Process
SMEs looking to secure financing backed by ILTE (formerly INVEGA) guarantees must meet specific eligibility criteria, including business size, sector, and compliance with De Minimis Aid Rules. These guarantees are designed to support businesses across various industries, with the amount and terms of financing varying depending on the sector.
Key conditions for ILTE guarantees include:
- Loan Amounts: The maximum loan amount available under the ILTE portfolio guarantee is up to €1,875,000, with different limits for specific sectors:
- Road Haulage Operations: Up to €937,500.
- Primary Production of Agricultural Products: Up to €234,375.
- Fishery and Aquaculture Operations: Up to €375,000.
- Loan Terms: The loan duration depends on the type of financing:
- Investment Loans: Up to 10 years.
- Working Capital Loans: Up to 5 years.
- Credit Lines: Up to 3 years.
- Guarantee Coverage: ILTE guarantees cover up to 80% of each transaction within the financial institution’s portfolio. However, the total disbursement cannot exceed the applicable sector-specific limits.
The application process with EMBank typically involves several key steps:
- Prepare Documentation: SMEs need to provide a detailed business plan, financial statements, and projections that outline how the loan will drive growth or innovation.
- Collateral and Guarantee Terms: While ILTE guarantees cover up to 80% of the loan, additional collateral may be required depending on the loan amount and type.
- Apply with EMBank: EMBank, as a trusted intermediary, helps streamline the application process by assisting businesses with document submission and ensuring all conditions for the guarantee are met.
The Role of EMBank in Facilitating ILTE Guarantees
EMBank plays a pivotal role in helping SMEs access ILTE (formerly INVEGA) guarantees by offering the right combination of expertise and tailored financial solutions. As a trusted financial partner, EMBank is well-versed in the needs of small and medium-sized businesses, making it easier for them to secure the financing required for growth. With ILTE guarantees, EMBank helps bridge the gap between SMEs and the capital they need to take their business to the next level.
Expertise in SME Financing
As a trusted financial partner, EMBank helps SMEs access ILTE guarantees by providing tailored financing solutions. With a deep understanding of the ILTE guarantee program, EMBank guides businesses through the application process, ensuring they receive the financing needed to support growth.
Tailored Financial Solutions
In addition to facilitating ILTE guarantees, EMBank offers a range of customized financial products. These are designed to meet the unique needs of each business, ensuring that SMEs have the financial tools they need to succeed, whether they’re investing in technology, expanding their operations, or seeking working capital.
How Can EMBank Help?
EMBank is dedicated to supporting SMEs in accessing the financing they need to grow and innovate. Through our partnership with ILTE (formerly INVEGA), we offer financial solutions that make it easier for businesses to secure loans, even with limited collateral.
Established in Lithuania and licensed by the European Central Bank, EMBank provides lending products ( working capital loan, credit line, overdraft, investment loans and leasing), daily banking products (account opening and local/global payments) and saving as well.
Please keep in mind that the above information has been prepared or assembled by the EMBank and is intended for informational purposes only. Some of the information may be dated and may not reflect the most current legal developments.
Please send an email to [email protected] to arrange a telephone call.
