13. January 2021
In times where the business activities of many companies has slowed down or come to a complete halt, LHV Pank decided to improve the terms of micro loans for small businesses. The maximum loan period is now six years and the loan amount up to EUR 50,000.
LHV’s micro loan is intended specifically for smaller and growing businesses that need a small additional impetus for the next leap in their development. Although the economy is going through more difficult times, LHV considers it important to give a boost to the backbone of the economy, namely small businesses.
Marko Kiisa, the Head of SME Financing at LHV, says that headwind sailing is characteristic of LHV, which is why it was decided to provide businesses with more loans in difficult times. ‘Promoting entrepreneurship has always been extremely important for LHV. We believe in hard-working small businesses in Estonia, we are well aware of the local environment, and we also know from our own experience that even during the crisis it is possible to conquer new peaks by acting wisely,’ he says.
Previously, it was possible to apply for LHV’s micro loan for a maximum of five years and in the amount between EUR 5,000 and EUR 25,000. Under the new terms, one receives a micro loan for one to six years and in the amount of EUR 50,000.
Businesses can use their micro loan as they wish, however, it is mainly intended to support business growth or the next leap in development. ‘In most cases, micro loans are indeed used for expanding business activities, purchasing equipment and machinery, raising working capital or making other smaller investments. Applying for a loan is extremely convenient and the keyword is flexibility,’ Kiisa adds.
Upon taking a micro loan, a guarantee from a private person or business is suitable as collateral, i.e. business assets do not have to be pledged as collateral. Self-financing is also not required for micro loans.
Any business registered in Estonia and operating here with a turnover or balance sheet total of up to EUR 2 million per year can apply for a micro loan. The maximum number of employees in a single business can be nine persons. There is also a condition that the business owner and the members of the management board do not have any overdue debts for the past two years and the business must not be at a loss at the time of receiving the loan.
The micro loan collateral is financed by the European Union through a guarantee from the European Fund for Strategic Investments (EFSI). The guarantee has been established by the European Union as part of the European Employment and Social Innovation Programme (EaSI) and based on the Investment Plan for Europe. EFSI has been established to help support the financing and implementation of productive investments in the European Union and to ensure better access to funding.
LHV Group is the largest domestic financial group and capital provider in Estonia. LHV Group’s key subsidiaries are LHV Pank and LHV Varahaldus. LHV employs over 500 people. LHV’s banking services are used by 247,000 clients, and pension funds managed by LHV have more than 180,000 active clients. LHV’s UK branch offers banking infrastructure to 140 international financial services companies, via which LHV’s payment services reach clients around the world.
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