EUR 332 million financing from the EIB and Luminor – who can receive it and what benefits are provided – Market news

According to survey data1, this year every fourth small and medium-sized company in Latvia plans to look for new investments or take a loan to achieve various business goals. In order to expand the amount of available financing and promote lending to small and medium-sized enterprises, Luminor banka in cooperation with the European Investment Bank (EIB) will provide financing with more favorable conditions, which will be available in the amount of more than EUR 332 million. Which companies and how can they use the offered financing, explains Mareks Gurauskas, Luminor Small and Medium Enterprises Service Manager.

“As a bank, it is important for us to find more and more new ways to provide our customers with affordable and affordable financing, that’s why we cooperate with the European Investment Bank to increase the availability of more affordable financing for small and medium-sized enterprises in Latvia and the Baltics. We hope that this support program, within the framework of which, by combining the resources of the European Investment Bank and Luminor Bank, a total of more than 332 million euros of financing is available, will encourage companies to start actively implementing their development plans. We have offered similar financing opportunities before, and many entrepreneurs used it for the development of their business – we hope that this time too it will bring the same good results and will allow many companies to fulfill their dreams,” shares Mareks Gurauskas, Luminor Small and Medium Business Service Manager.

What is the European Investment Bank?

Although the European Investment Bank (EIB) has been providing financing to Latvian companies for 30 years, not everyone knows that it is a long-term lending institution that belongs to all European Union (EU) member states. The purpose of EIB financing is to increase the competitiveness of countries, promote innovation and sustainable development, as well as reduce the economic gap between EU countries.

“A larger share of EIB financing is allocated to those EU countries whose average income lags behind the EU average, including Latvia. As small and medium-sized enterprises usually form the backbone of national economies, they are one of the EIB’s priorities, and investments in their innovation and sustainability are extremely important for the growth of the country’s economy. Also, more favorable financing conditions promote a faster transition of companies to the green economy,” states M. Gurauskas

Who can get funding?

According to the agreement between the EIB and Luminor, in total, more than 332 million euros are available for loans in the Baltic States, which will be issued to small and medium-sized enterprises on more favorable terms. The company must operate in the Baltic States and have no more than 3,000 employees, including those working in affiliated companies. Also, self-employed persons who are registered in the Enterprise Register and have VAT payer status can receive loans.

It should be noted that there are certain sectors whose companies cannot apply for the offered financing. These are companies involved in activities or projects such as tobacco-related industries, the gambling industry, the manufacture of weapons, ammunition, explosives, military equipment or infrastructure construction, property speculation, as well as industries that cause high environmental pollution. Also, activities that limit people’s individual right to freedom, activities that are considered ethically controversial (for example, animal testing) and other individual activities are not funded.

What are the favorable conditions and how much can be borrowed?

Depending on the type of investment, various relaxations of financing conditions are applied. “To encourage companies to move towards more sustainable solutions, a lower interest rate has been applied to Luminor and EIB financing loans. For example, for projects that meet the EIB’s green financing criteria, the interest rate can be reduced by up to 70 basis points. On the other hand, for other loans, such as investment projects and for leasing, an interest rate 25 basis points lower than the standard calculated bank interest rate is applied,” explains M. Gurauskas.

The amount of the loan granted to the company can be from 10 thousand to 12.5 million euros, but the total value of the project for which the financing is granted cannot exceed 25 million euros.

How can the funding be used?

The received financing can be used by companies for the purchase, renovation or expansion of fixed assets, financing of construction costs, investments for the purchase of technically necessary land, for example for the installation of a solar panel park, as well as for the purchase of non-real estate assets (for example, construction equipment) to be leased to third parties. . Funding can also be received for investments that will contribute to the reduction of overall greenhouse gas emissions, while helping to achieve the climate goals reflected in the strategies of the Baltic States.

Luminor