SME Finance, the leading fintech platform for non-banking financing in the Baltic states, will use the investment to meet the working capital financing needs of enterprises through its self-service factoring platform, a fully automated solution through which customers benefit from the fastest factoring approval in the EU.
“Given the current working capital constraints facing small and medium-sized enterprises and the substantially reduced availability of bank loans in the region, this is a timely and much-needed partnership of next-generation financial technology with public financing that will enable SMEs and midcaps across the Baltics to more quickly access financing to overcome their cash flow shortages.” says the CEO of SME Finance, Mindaugas Mikalajūnas.
Lithuania, Latvia, and Estonia have seen the largest decline in bank loans awarded to SMEs across the EU region during the period of the pandemic.
The first wave of funding from the EIB is expected to reach businesses by the first half of 2021. SME Finance plans to offer business financing with 4 to 8 percent annual interest rates. The maximum factoring limit granted to individual enterprises will be capped at EUR 5 million.
Of the EUR 80 million received, 70 percent (EUR 56 million) will be granted to factoring services for SMEs and 30 percent (EUR 24 million) to factoring services for midcaps. Approximately 60 percent of the funds will be allocated to Lithuanian businesses, while the share awarded to Latvian and Estonian enterprises, in a common portfolio of factoring services, will amount to 20 percent each.
About SME Finance
SME Finance is a fintech firm established in 2016 to address an identified funding gap in the financing of working capital for SMEs and midcaps. Since its establishment, the company has financed invoices worth more than 459 MEUR, has provided financing services to 500 clients, and has raised more than 114 MEUR from local and international investors. SME Finance now has 80 MEUR of available capital and provides short and long-term loans, factoring, and leasing. The company has partnerships with world-leading providers of trade-related insurance solutions, including Euler Hermes and Coface. SME Finance is headquartered in Vilnius, Lithuania.
About the European Investment Bank (EIB)
The European Investment Bank is the bank of the European Union, owned by and representing the interests of the member states. It works in conjunction with other EU institutions to support EU policy and provides lending, blended finance, and technical advice for investment both within and beyond the EU. The EIB is the world’s largest multilateral borrower and lender.
