Small businesses in Baltics get new finance option via "Juncker plan" guarantee

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The European Investment Fund (EIF) and venture capital firm Capitalia have signed an agreement on a guarantee instrument supporting small businesses in Latvia, Lithuania and Estonia, for a total amount of €10 million, the European Commission announced February 25.

"With this guarantee, small businesses will get better access to finance," the Commission said in a release.

Marianne Thyssen, Commissioner for Employment, Social Affairs, Skills and Labor Mobility, said: "Giving small entrepreneurs the means put their talent to work with better access to finance is one of our key priorities. This is how we will build a fairer and a more inclusive European Union."

The agreement is supported by the European Fund for Strategic Investments (EFSI), part of the Investment Plan for Europe, and by the Employment and Social Innovation (EaSI) program.

Head of Inclusive Finance at EIF, Per-Erik Eriksson said: “With the support of the EU’s EaSI program, Capitalia will be able to scale up its micro and small business lending activities in line with its strategy to maintain its unique market position as alternative financing provider in the Baltics. This expansion of its activity is expected to provide a significant impact in terms of financial and social inclusion in all three Baltic countries and EIF is pleased to support this aim.”

“We are very pleased that Capitalia is the first private alternative financing institution in the Baltics that has qualified for this reputable guarantee program. Conclusion of this deal with EIF means that we will be able to provide loans to businesses at more favorable rates and without collateral requirements. Under this program companies will be able to receive financing of up to €25 000,” said Juris Grišins, manager of Capitalia.

In order to qualify for the EaSI guarantee companies should have turnover below €2 million and have no more than 9 employees. Financing to businesses will be provided for terms of 3 months to 5 years. Companies can apply for the loan and find other qualifying criteria through the webpage of Capitalia

Operating since 2007, Capitalia has financed more than 5,000 businesses in Latvia, Lithuania and Estonia, investing over €50 million in their development. In addition to loans, Capitalia provides venture capital as well as fundraising and other investment banking services.

Under the European Programme for Employment and Social Innovation (EaSI) the European Commission supports microfinance and social entrepreneurship finance with an overall envelope of €193 million for the 2014-2020 period. The aim is to increase access to microfinance, i.e. loans of up to €25,000, in particular for vulnerable persons and micro-enterprises.

About the Investment Plan for Europe

The Investment Plan for Europe, known as the “Juncker Plan”, is one of the European Commission’s top priorities. The projects and agreements approved for financing under EFSI are expected to mobilise almost €380 billion in investments, and support 842 000 SMEs in the 28 Member States. More information on the results of the Investment Plan for Europe is available here.


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