With tighter lockdown restrictions imposed in Lithuania, small and medium-sized enterprises (SMEs) will face a dual challenge: on the one hand, companies will face cash flow issues, and on the other– potential lack of bank financing. During the heightened lockdown period, Lithuanian fintech company Bankera is prepared to offer short-term financing for SMEs– offering loans with a double guarantee and postponement of debt repayment until the end of the lockdown.
“We are prepared to assist not only with solvency problems. In Lithuania, we have a significant number of cases where, in the context of the pandemic, businesses are discovering new opportunities – taking up new operations, transitioning their business online, beginning to manufacture or sell items and offer services, which had less demand before the lockdown. Funds are often lacking for these activities and so, being more flexible than the large financial institutions, we will help secure the necessary financing alongside an opportunity to postpone debt repayment,” Bankera cofounder Vytautas Karalevičius says.
Companies operating in Lithuania will be eligible for a Bankera business loan starting at 2,000 euro and will be able to postpone repayment until the COVID-19 pandemic concludes or for a shorter period. Bankera calculates interest rates on a per case basis for each company, after evaluating the company’s specific operations and the risks and opportunities related to the COVID-19 pandemic.
A company’s suppliers or other partners can guarantee the loan, thus reducing the risk to the financial institution and allowing it to offer lower interest rates. Business loans will be offered for a period ranging from one to 24 months. SMEs will be able to return funds at a free schedule, even after the lockdown, when their operations are no longer limited in any way.
Loans with a double guarantee
Bankera offers an exceptionally flexible business financing solution, which allows necessary funding to be secured with the guarantee of a supplier or business partner.
“During the pandemic, businesses are faced with cash flow problems and this can have a negative impact on first their suppliers, and secondly on the economy as a whole. We wanted to offer a solution that would help prevent such problems, and so we developed a fairly simple idea – offering loans for small and medium-sized enterprises with a supplier’s guarantee. The supplier is not interested in their client going bankrupt because it would mean a loss of revenue for them as well, which could, in turn, lead to their own bankruptcy. By combining the interests of both parties, it was possible to achieve mutual solidarity in this difficult period, helping prevent businesses from failing,” V. Karalevičius says.
A Bankera loan can also be issued to an SME if a company’s partner vouches for half of the loan. For example, a hairdresser may have ordered cosmetics from a supplier for 5,000 euro. However, they simply cannot pay the supplier this amount because their work is suspended during the lockdown, leaving them without income. It isn’t worthwhile for the supplier to have the hairdresser go bankrupt because they would not only not recover the amount due, but they would also lose a regular client and future revenue. Thus, by agreeing to vouch for 50% of the loan, the supplier can allow the hairdresser to keep their business and simultaneously protect their own revenue.
Financing without leaving home
All of Bankera’s business financing services are available remotely online. Businesses interested in obtaining a loan will not have to travel anywhere or send physically signed documents by post.
A company seeking to obtain business financing should submit an application on Bankera’s website and submit additional documents. Bankera specialists will evaluate whether the applicant’s risk level is acceptable and return an offer as appropriate. The applicant company always has the opportunity to have a live consultation with Bankera specialists remotely.
Companies and self-employed individuals can fill out a loan application on the Bankera online banking platform.
A solution recognised by the European Commission
Bankera brought the new business financing solution from inception to service in just three months.
At the #EUvsVirus hackathon organised by the European Commission to combat the impact of the coronavirus pandemic in late April, the small and medium-sized enterprise financing solution created by the Bankera team was recognised as the best in the Digital Finance category.
Bankera became the only Lithuanian team to win one of the six main awards for the European Commission’s hackathon. The Bankera team was awarded a special financial prize by Spain’s CaixaBank for the innovative solution they created. At the Fintech Week Lietuva event held in Lithuania in June, Bankera was recognised as the company creating the best fintech solution for business, contributing to the business community’s goals for a sustainable future.
Bankera currently offers invoice and payment collection solutions for both private individuals and businesses seeking more affordable and more convenient ways to manage payments and everyday finances. Fintech company Bankera was founded by three entrepreneurs from Lithuania: Vytautas Karalevičius, Mantas Mockevičius, and Justas Dobiliauskas.