HeavyFinance secures investment from Lithuanian institution
Lithuanian national development institution ILTE has begun investing in agricultural loans on the HeavyFinance peer-to-peer lending platform.
ILTE plans to make investments up to the value of €2m (£1.67m) by the end of the year by investing under its Avietė Crowdfunding Loans facility.
The institution will invest up to 40 per cent of funds or up to €30,000 in loans for Lithuanian farmers who meet a particular criteria. The remaining loan amount will be financed by investors on the HeavyFinance platform.
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“Small and medium-sized farms are increasingly determined to transition to more sustainable farming practices, but they often struggle to secure financing from traditional financial institutions for the necessary equipment or to increase working capital,” said Laimonas Noreika, chief executive of HeavyFinance.
“We offer them attractive terms and a repayment schedule tailored to their cash flow, which is why we have already provided loans totalling €60m. Avietė will not only increase access to capital for small and medium-sized farms but also encourage small investors to lend to farmers.”
In order to be eligible for Avietė loans, Lithuanian farms must have been operating for at least two years and they must be applying for funding for investments or working capital. They will also need to submit financial statements, bank account statements, and consent for data verification.
Noreika believes that approximately 80 per cent of farmers seeking to borrow through the platform will meet the Avietė criteria.
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“The ‘Avietė’ crowdfunding loans are one of the alternative financial instruments provided by ILTE to help small and medium enterprises secure loans under market conditions when they cannot obtain financing through traditional means,” said Agnė Mačiulienė, senior project manager in the ILTE Indirect Loan Products Department.
“Loans are provided through crowdfunding platforms, and the state’s contribution can cover up to 40 per cent of the loan amount.”
ILTE is a state-established financial institution which supports Lithuanian businesses by helping them to secure funding. Its Avietė loans are intended to enable small and medium-sized enterprises to borrow through crowd funding platforms.
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