Guarantees for Large Companies
Individual guarantees for loans, provided by ILTE, offer solutions to unattractive or insufficient collateral for financial institutions and facilitate the access to the funding sources.
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This is translated information. In case of any discrepancies, the original Lithuanian version shall prevail. |
Who is eligible?
Large companies with at least 250 employees.
Applicable loans
Guarantees for loans of large companies are provided for loans intended for:
- tangible investments: purchase, construction, repair or reconstruction of non-current assets;
- intangible investments: technology transfer by acquiring patents, licences or other unpatentable technical know-how;
- working capital.
- refinancing of investments from enterprise funds (no earlier than within last 3 months before the date of receipt and registration of the guarantee application). In such case the guarantee application must be accompanied by documents supporting expenses and payment.
The need for investment or working capital must be recognised by ILTE as valid and paying off and the borrower as financially capable of fulfilling its financial liabilities.
Guarantee amount
The maximum guarantee amount is EUR 2,250,000. If several guarantees have been obtained, the aggregate outstanding amount may not exceed EUR 10,000,000. The guarantee amount may be up to 80% of the principal amount.
Minimum proportion of own funds – 10 %.
Guarantee fee
Where to apply
How does it work?
In order to use this financial instrument, large company is required to apply directly to the financial institution and agree on the amount of funding. The financial institution will assess the project, ability to repay loan and calculate the amount of guarantee needed. Subsequently, the financial institution will submit a request for a guarantee on a loan as well as other related documents to ILTE.
The financial intermediary has to pass on the advantage received through the State guarantees to the beneficiaries, by granting a loan with lower interest rate or lower collateral requirements for the borrower. The rate of interest on a loan with a guarantee must be lower or collateral requirements must be on more favourable terms than in case of a loan without a guarantee. The difference in interest rates or more favourable collateral requirements for the borrower must be specified in the documents submitted by the guarantee recipient to ILTE along with the application for a guarantee and in the loan agreement.
- The borrower is not subject to insolvency or restructuring proceedings;
- The borrower is eligible for de minimis support;
- The credit rating assigned to the borrower by the credit institution is at least B- or B3 according to the rating system used by international rating agencies (Standard and Poor's, Fitch and Moody's), or the credit institution provides a rating equivalent to such rating systems;
- After granting the working capital loan, the borrower's equity ratio must be at least 10 per cent. The equity ratio shall be calculated as the ratio of the borrower's equity to all the assets reported in the balance sheet, based on the loan taken and based on the last (annual or quarterly) balance sheet of the borrower's financial statements.
In exchange for the guarantee, the borrower should pay a one-off guarantee fee, payable before the issue of the guarantee.
The guarantee fee shall be determined based on the guarantee amount and the duration of the guarantee, i.e. a fixed base will be applied for the first year (months 1 to 12), and an additional annual premium will be applied for each following year.
The fixed base will depend on the age of the borrower: 2 per cent for companies aged less than 3 years*; 1 per cent for companies aged more than 3 years (in the case of a working capital loan) , 1.5 per cent for companies aged more than 3 years (in the case of an investment loan).
* the age of the company is calculated from the date of receiving the guarantee application.
The annual premium will amount to 0.2 per cent (in the case of an investment loan) and 0.4 per cent (in the case of a working capital loan) for each additional year (i.e. 0.2% / 0.4% for months 13 to 24, for months 25 to 36, etc.).
Pricing table:
| Segment | Fixed base | Annual Premium |
| All companies aged less than 3 years | 2% |
working capital 0.4% investment 0,2% |
| Working capital, 3 years or more | 1% | |
| Investment, 3 years or more | 1,50% |
Example of guarantee pricing
A large company aged more than 3 years is taking a working capital loan. The bank loan matures in 2 years. The guaranteed portion of the loan will also be repaid within 2 years (guarantee losses of large companies are covered under loss sharing scheme).
Guarantee fee = Fixed base + (n * Annual premium)
Guarantee fee = 1% + (1 * 0.4%) = 1.4%
List of documents to be submitted is presented in the original Lithuanian version.