Farmers actively use ILTE’s funding– more than 170 applications have been approved within two months
Since the beginning of funding in May, ILTE has received more than 500 applications. Currently, more than 150 funding agreements with a value of EUR 15.4 million have been signed. After assessing the first results, it is planned to increase funding allocated to the instrument from EUR 40 million to EUR 50 million and to ease part of the funding conditions.
“The first results of the instrument clearly showed that the need for working capital financing in agriculture is high. To ensure that funding reaches as many farmers as possible, we are increasing the amount allocated to soft loans and initiating amendments to the conditions of the measure. This will allow a better response to the needs of the sector and help farms adapt to difficult market and natural conditions”, acting Minister of Finance Kristupas Vaitiekūnas says.
Under the planned changes, EUR 10 million will be additionally allocated to loans, bringing the total funding to EUR 50 million. Moreover, funding will be reallocated, where a higher proportion of funds will be directed to farms affected by fluctuations in market prices or adverse climatic events.
EUR 40 million, out of the total amount allocated, is expected to finance the farms affected by market disturbance or extreme weather conditions and EUR 10 million – the farms unable to obtain financing on the market. It is also planned to mitigate the solvency and liquidity indicators justifying the detriment in order to make preferential funding available to a wider range of applicants.
The most interest is in soft loans
Currently, more than 170 loans with a value of EUR 17.3 million have been approved, of which more than 150 funding agreements with a value of EUR 15.4 million have been signed.
“The evaluation of the applications shows that the greatest need is precisely for soft loans. Practice has also shown that some farms facing financial difficulties do not meet the criteria currently in force. Therefore, the proposed amendments will help to better reflect the real situation in the sector”, ILTE member and Head of the Business Development Service Tadas Gudaitis says.
The most common errors are documentation deficiencies
According to ILTE specialists, one of the most common reasons for the delay in the evaluation of applications is inadequate preparation or failure to submit mandatory documents.
The applications are often accompanied by unsigned, irregular or incomplete documents, therefore, additional information is to be requested. The applicants are encouraged to read the funding conditions carefully before submitting their application and to make sure that all the necessary documents have been submitted, as this would help ILTE to take a decision more quickly.
Other funding instruments are also available to farmers
In addition to targeted working capital loans, ILTE offers also other funding opportunities for participants in the agricultural sector. Recognised agricultural cooperatives may apply for funding to ensure business liquidity – EUR 100 million is earmarked for this targeted instrument. These loans are granted on preferential terms.
Also, the farms may be granted investment loans from ILTE's own funds, part of which may also be used to finance the working capital.