EIF provides Lithuania’s SME Finance with €40m to fund small business lending
The stretched state of European funding is set to enjoy welcomed easing this week as the European Investment Fund (EIF) teams up with Lithuania-based SME Finance to inject more than €40 million in funding for micro and small enterprises in the Baltics, Finland and the Netherlands.
EIF partners SME Finance to commit €40m to SMEs
Through a guarantee agreement of up to 80% from the EIF, SME Finance is to increase its lending to targeted businesses operating within the scope of “innovation, sustainability or digitalisation projects”, through loans, leases and business factoring.
Boiling it down even further, very small businesses, being those that employ no more than 10 employees while also not exceeding yearly revenues of €2 million, will benefit from SME Finance’s new €50 000 microfinancing commitment that promotes growth among the smallest and most deserving entities.
It’s no secret that small and medium-sized enterprises are struggling to connect to financing within the current economic climate, especially those situated in Lithuania.
In its announcement of the initiative with SME Finance, the EIF cited a report from the European Commission, published in December 2022, which indicated that Lithuanian banks had rejected 32% of loan applications from small businesses, much higher than the EU average of 7%.
The necessity for this environment to change is being driven by the InvestEU programme, which seeks to mobilise a total of €372 billion in additional investment through both public and private funds as part of the EU’s policy priorities for 2021 to 2027.
“This agreement with the EIF means SME Finance will be able to offer financing to businesses on significantly better terms,” says SME Finance CEO, Mindaugas Mikalajūnas.
“Our flexible and digital financing solutions already cover investment projects and working capital. We now offer even better pricing, reduced collateral requirements, or even no collateral at all.”
“We are fully aligned with SME Finance’s motto of empowering growth for small businesses seeking to invest in innovation, digitalisation, and sustainability,” adds Marjut Falkstedt, CEO of the EIF.
“These are key InvestEU priorities and in achieving them, we are pleased to support the agile online and alternative lenders helping to diversify sources of financing for SMEs in Lithuania and the Baltic region.”
