The first state-supported crowdfunding instrument Avietė loans is launched

Date

2018 10 25

Rating
0
money-856035_1280.jpg

Representatives of UAB Investicijų ir Verslo Garantijos (Investment and Business Guarantees, Invega) and the Platform FinBee for Business have signed a contract for the launch of a new instrument for the crowdfunding of business loans called ‘Crowdfunding loans Avietė’ (hereinafter referred to as ‘the Avietė loans’). This is the first crowdfunding loan instrument in Lithuania, where the State, together with other investors, will directly fund the business needs through alternative financing platforms.

‘All sources of funding are important for small businesses which seek funding. Currently, crowdfunding platforms are becoming increasingly popular because they enable more flexible business borrowing when, for example, bank loans or funding from private and venture capital funds are not suitable but individuals who dispose of some unused money may become  investors. This financial instrument will therefore attract private funding, which will significantly increase the level of investment,’ said Minister of Economy Virginijus Sinkevičius.

The Avietė loans will make it easier for small and medium-sized businesses to borrow through crowdfunding platforms, and up to EUR 10 000 will be made available from the state resources for a funded  business loan. The maximum amount financed from the state resources will be limited to 40 % of the loan amount. The loan will be granted for a period of up to 3 years and will be intended for investments and working capital but not for the refinancing of financial liabilities, the funding of financial activities or residential immovable property.

The Ministry of Economy has allocated EUR 4,615 million in state resources to fund the Avieté loans. These state resources consist of funds that were used successfully during the EU Structural Funds 2007-2013 financing period and which were repaid or are to be repaid through the financial instruments implemented.

‘This instrument is excellent news for small and medium-sized businesses in Lithuania and another concrete step to help the sector grow, expand and become stronger. FinBee for Business cooperation with Invega is also good news for those who invest in loans as this demonstrates the state’s reliance on crowdfunding as a growing lending to business instrument,’ says Head of FinBee for Business Audrius Gentkevičius.

Crowdfunding is a funds collection model where a business project that is made publicly available on a specific online platform can be financed by any investor registered on the platform. Currently, there are eight crowdfunding platform operators approved by the Bank of Lithuania.

All crowdfunding platform operators operating in the Republic of Lithuania which are included on the public list of crowdfunding platform operators and which fund business projects that fulfil the conditions of the Avietė loans may contribute to the implementation of the Avietė loans and conclude a cooperation agreement with Invega. Operators may submit applications for signing a cooperation agreement with Invega electronically to: aviete@invega.lt or to the address: Constitution pr. 7, 16th floor, Vilnius.