Under the guarantee agreement, EIF will enable more than EUR 40 million in new financing, encompassing loans, leases, and factoring. This funding is intended for micro and small enterprises as well as small mid-caps in the mentioned regions.
Backed by EIF's portfolio guarantees of up to 80%, SME Finance aims to expand lending to targeted businesses. The objective is to stimulate growth by investing in innovation, sustainability, or digitalisation projects.
Mindaugas Mikalajūnas, CEO of SME Finance, explained that the partnership with EIF will allow them to provide financing to businesses with notably better conditions. Their adaptable digital financing options already address investment and working capital needs. Now, they can offer improved pricing, lower collateral demands, and occasionally even eliminate the need for collateral altogether.
SME Finance will also provide microfinancing, tailored for very small businesses with up to ten employees and annual revenues not exceeding EUR 2 million. EIF's mission is to address the persistent financing challenges that small and medium-sized enterprises encounter.
Marjut Falkstedt, Chief Executive of EIF, confirmed that they share SME Finance's goal of enabling expansion for small businesses interested in investing in innovation, digitalisation, and sustainability. These objectives are in line with InvestEU's main focus. Falkstedt expressed their satisfaction in supporting nimble online and alternative lenders, as these efforts contribute to broadening the range of financing options for SMEs in Lithuania and the Baltic region.
In June we covered the news where EIF granted illimity Bank two guarantees worth a combined EUR 50 million. These guarantees aim to enhance financing access for Italian SMEs.
The supported SMEs primarily focus on sustainability, innovation, and digitalization. These EIF transactions are also supported by the InvestEU program. Through the InvestEU Innovation and Digitalization guarantee of EUR 25 million, illimity Bank can further assist innovation and digitalization-oriented enterprises. This backing will enhance financial access for research-intensive SMEs and small mid-caps, while promoting the adoption of digital technologies and business transformation.
Conversely, the InvestEU Sustainability guarantee of EUR 25 million helps illimity Bank to promote an eco-friendly and sustainable economic shift. It will encourage environmentally conscious and inclusive investments.
This initiative empowers small and medium businesses to secure crucial financing, facilitating their expansion, innovation investment, and job creation. With a dedication to supporting such businesses, illimity Bank continues its collaboration with EIF, which began in December 2021. This partnership aims to effectively employ these funds, fostering economic growth in Italy.
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