How to get business finance?

Are you planning to start, expand, or upgrade your existing business? Or have you encountered unexpected difficulties and suddenly need money for working capital? Business finance can help in these situations. It's a great way to react quickly to resolve difficulties, get the working capital you need, start a new business that needs initial investment, or grow an existing one. It is an excellent opportunity to upgrade your business, its equipment, and technology. Business finance can be both repayable and non-repayable. But let's start at the beginning.

 

What is business finance?

Business finance is a loan, grant, or other financial assistance provided to a specific business. While aid in the form of grants is usually earmarked for a specific activity (e.g. one of the European Union's grants promotes the deployment of renewable energy sources for business use, so it can finance the installation of solar power plants), loans or other financial aid (from entrepreneurs, investors) often have no purpose and can be used in an extensive range of ways. Business finance is a way to grow, renew, expand, and pay for existing or day-to-day liabilities faster and more efficiently. It can also be a great incentive to start a new business, to realize your vision and aspirations. Business finance is divided into two broad groups: non-repayable and repayable support.

 

 

Non-refundable business support 

Non-reimbursable business support is a type of support that covers all or at least part of the costs of an action. Business support from the European Union, the State, districts, municipalities, or other entities may be available for new or existing businesses. Typically, the support is earmarked for a specific activity or action, such as technological upgrading of the enterprise, training of employees, creation of new jobs, and so on.

Repayable support

Repayable business finance is, in other words, simply a loan that can be provided by any European bank, credit, fast credit, leasing companies or lending platforms. It enables businesses to achieve their goals faster, to buy the tools and services they need to do their jobs, to pay their bills faster, and to invest in their expansion and growth.

 

Profitus Business Loans

Business loans are one of the options for financing your activities. Profitus Business Loans for small and medium-sized business growth is an easy and fast way to borrow money without bureaucracy and hassle. A business loan is an opportunity to grow your idea faster and more efficiently. It is designed to cover day-to-day business expenses, expansion, tools, necessary goods or services, and liabilities. A business loan can also be used to refinance other liabilities. You can get a loan of up to €5,000,000 very quickly, with annual interest rates as low as 5%. Loans are available for real estate development projects, expansion, renovation, day-to-day business expenses, the purchase of necessary goods, services, or equipment, payment of taxes, lease projects, completion of a real estate project, and any other needs you may have. 

 

 

EU support for new businesses

EU funding programs are another way to get funding. For example, the European Horizon research and innovation program, which runs until 2027, promotes sustainability, combats climate change, and fosters competitive growth in the European Union. For example, it offers investment support for companies wishing to install solar power plants to improve energy efficiency; support to encourage the development and deployment of environmentally friendly products or technologies, etc. Funding can be direct or indirect.

 

Indirect funding

Indirect funding is regulated by national and regional authorities through the European Structural and Investment Funds or the Economic Recovery and Resilience Facility. Indirect funding accounts for around 80% of the total budget allocated by the European Union.

 

Direct funding

Direct funding is support for a specific business. It can be either grants - project-specific support (grants are usually subject to public calls for tenders, time-limited calls for proposals), or contract support for the purchase of specific goods or services, or works (e.g. training, research, equipment).

 

European Union funding is open to companies of all sizes and sectors, both new and established, businesses and entrepreneurs, and start-ups. Each year, EU support helps more than 200,000 businesses to grow and consolidate. To be eligible for EU funding, you need to meet the eligibility requirements for a specific grant and complete an application (the call for applications is valid for a limited period, usually 2-3 months).

 

The European Union has a strong interest in the creation of new businesses, which is why several EU support schemes for new businesses exist. New business funding can help you get started much more quickly and efficiently, help you buy the premises and equipment you need to run your business and help you create new competitive jobs. EU support for small business start-ups is a great springboard to help you get up and running faster and more efficiently.

 

 

Municipal business support

Each municipality has a set amount of support for the entire district, which can be used to support a wide range of businesses, both new and existing.

 

Municipal business support 

Each municipality aims to promote small businesses and offers support applications. You can find out what support is available from your municipality on the municipality's website or on the Tourism and Business Information Centre's website.

 

Municipal support for business start-ups

Municipalities also aim to help new business development and offer at least a few grants for new start-ups. These can cover the initial start-up costs of a company or even participation in various exhibitions and fairs for businesses. You can get all the information you need on start-up support from the regional business information centers.

 

Business support from the Ministry of Agriculture

Agriculture is a very broad and investment-intensive sector. It requires a significant outlay to establish a new, efficient farm and to acquire the necessary tools and machinery. The Ministry of Agriculture of the Republic of Lithuania is interested in encouraging the start-up of new businesses in rural areas and thus improving the economic situation of smaller municipalities and districts. It is for this reason that the Ministry of Agriculture of the Republic of Lithuania provides support for new and established businesses.

State support for business encourages micro and small enterprises in rural areas to grow and expand. It encourages economic activity by farmers and other natural persons, covering a wide range of agricultural and non-agricultural businesses, the production, processing, refining, sale, and provision of various services. The Ministry of Agriculture currently offers 4 support packages:

support for the establishment of young farmers

support for setting up economic activities in rural areas

support for small farmers

support for investments for the creation and development of non-agricultural activities

To benefit from the State support for business, it is necessary to fill in an application form, and submit a business plan, financial statements, certificates, commercial offers from suppliers, and other information necessary for obtaining the EU support, as specified in the description of the particular support.

 

 

State support for individual activities

Self-employment is a form of freelance work. It is a really popular form of work in recent times. However, becoming self-employed and obtaining a self-employment certificate also requires investment. Leaving a salaried job and starting a self-employed business often leads to really serious financial difficulties. Especially if the activity is new and there is no steady customer base or guaranteed sales. Some activities also require special equipment, tools, raw materials, and, last but not least, premises to run the business. It is good that the State encourages self-employment and offers various supports for anyone embarking on this path.

 

State support for self-employment can make it much easier and simpler to get off the ground and ease the heavy burden of start-up costs. People who are setting up a job for the first time in a micro-enterprise that they have set up for themselves may be eligible for a subsidy from the Self-Employment Support Measure. This subsidy can be obtained by drawing up an individual employment action plan with an employment support measure at the Employment Service. This support is open to all disabled persons of working age who have a severe disability or a working capacity of up to 25 %; unemployed disabled persons of working age who have a working capacity of between 30 % and 40 %, or a moderate level of disability; and unemployed persons aged under 29 years. 

 

To benefit from this support, you must complete an application form. The assessment focuses on those who want to set up their own business in rural areas or where there is high unemployment. Applications are also assessed in terms of the applicant's resources, the amount of support requested, the planned activity, the number of jobs, work experience, and qualifications. For more information on state support for individual activities, visit the Employment Service website.

 

Financing for small businesses

As a small business, it is not uncommon for larger purchases to require additional funding. Day-to-day expenses, marketing costs, purchasing raw materials, resources, and staff salaries often make up a large part of the costs and there is simply no money left for business expansion or renewal. In this case, business owners often look for additional financing. Financing for small businesses can range from non-repayable European Union support to loans. Small businesses are supported not only by the EU, but also by the Republic of Lithuania, specific ministries, municipalities, or other smaller entities.

 

Every few years, the EU sets funding priorities. Until 2027, the focus is on research and experimental development and innovation, digitizing business processes, boosting the circular economy, and installing renewable energy sources. Small business owners can therefore confidently take advantage of European funding to upgrade infrastructure, digitize processes, develop new products or projects, install renewable energy sources, or even recycle waste. If, however, grants are not available, there is always loan financing for small businesses.

 

 

 

Loans for businesses

Financing for a small business, a large company, or even a sole proprietorship can help you become a larger, more stable, or more profitable entity. Unfortunately, European financing for business is not always available - to receive it, certain conditions and requirements must be met. When it is not possible to obtain such financing, businesses and their owners often turn to loans. Business loans are also a great tool that helps in far more than one area.

Business development assistance (businesses that want to grow have high costs. To improve the situation, large initial investments are often needed. Loans can accelerate business growth, help open new branches, increase production capacity, create new jobs, etc.).

Support for starting a business (a loan for starting a business is a real salvation for those who have a wonderful idea, and a great plan to implement it, but do not have enough savings for it. The loan will allow you to start your business faster, purchase the tools or devices necessary for work, and allow you to use them faster).

Replenishment of working capital (working capital is the kind of funds without which it will not be possible to develop activities. Every day, companies incur various vital expenses. A sudden decrease in working capital can put the activities at great risk. Sometimes it happens that it is necessary to borrow to operate properly. Most of the time, there is a lack of working capital for seasonal activities or businesses that need to wait longer for customer payments. Additional finance helps to cover daily expenses: wages, utility bills, raw materials, or resources needed to provide goods or services).

Installation or renewal of technologies and equipment (to achieve greater business productivity or performance, it is often necessary to invest in innovations. Innovations are indeed significant and help to grow rapidly, but, it is no secret, that they cost a lot. Despite this, Lithuanian companies allocate a large part of their capital specifically to the installation of technologies and equipment updates, so a business loan is often needed).

The ability to catch favorable circumstances (sometimes businesses receive great offers, for example, when a supplier of raw materials offers to purchase a larger but cheaper quantity of production or notice unique opportunities that require an unexpected, and often large, amount. Such cases can help the business to save, grow, or increase their competitiveness, but require investment here and now. In order not to miss such opportunities, business owners often choose to take loans and thus take advantage of a favorable opportunity).

 

How to get a business loan?

You can get a business loan without even leaving your home. For example, when borrowing through Profitus, a business loan offer is provided in just a few days after applying, really quickly and easily, and most importantly, on extremely flexible terms! All you have to do is fill out the inquiry form and within a few days, our consultants will contact you and offer the most favorable solution for your business! In addition, you will find a business loan calculator here, so you can find preliminary information about possible interest and fees right now. "Profitus" offers to borrow up to 5 million euros for a period of 3-36 months, and interest rates start at just 5 percent!

 

Who can get a business loan?

All legal entities with small, medium, or large companies, conducting individual activities or working under a business certificate can apply for a business loan. A business loan can be both long-term, for investments and business development, and short-term, when working capital is needed. It is really easy to get a business loan if the company's income is growing steadily, diversification is applied, the companies have a good credit history, and their sales are profitable.

 

How to prepare for a business loan?

For the loan application not to be rejected, it is necessary to prepare in advance. First of all, you should define what amount you want to borrow what exactly it will be used for, and what problems to solve. Another important issue is business capacity, i.e. i.e. how the business will meet its loan obligations. It is very important to reflect and prepare not only for an optimistic but also a pessimistic scenario, to consider even such cases as the loss of the largest customers or a decline in income, and to prepare a plan for how the loan will be managed in such a situation. In addition, before applying for a loan, you should also prepare all the latest documents about the company's financial situation: annual financial statements, bank account statements, a report on the fulfillment of previous obligations (if any).

 

 

 

What is important to know before taking out a business loan?

When taking out a business loan, you should know that in some cases collateral is required to obtain loans.

Unsecured loans are a great option when you need a small amount quickly: small investments, additional finance for working capital, when there is a particularly favorable opportunity to invest, etc.

Collateralized loans are usually larger loans intended for business modernization, greater development, and investments. The collateral for such loans can be real estate, part of the company, production, etc.

Before taking a loan, think carefully about your options, and assess the possible risks. Borrow wisely and such business financing will not be an anchor that stops growth, but a sail that helps you quickly and efficiently cross the business ocean.