Rising costs, unfinished planned investments, changes in banking conditions or the cessation of funding, and the drive to restore the business model to pre-pandemic status are the challenges that Mid-Cap companies face during COVID-19. Artūras Vilkas, VIVA Chief Investment Officer, talks about the possibilities of the State Investment Management Agency (VIVA), which manages the State Aid Fund, to help large and medium-sized businesses return to the pre-pandemic level and provide financing for necessary investments.
Business loans and investments
VIVA was established as an essential pillar for the country’s medium and large businesses affected by the COVID-19 pandemic. State funds reach companies through the State Aid Fund (the Fund) managed by VIVA. Once the pandemic situation has subsided and the contract period has expired, the companies will repay the loans and investments received from the state with interest to the budget. As a result, they will continue to operate under normal economic conditions. Thus, through an innovative financial assistance model, the state helps companies preserve jobs, address liquidity challenges, strengthen sectoral competitiveness and the capital market, and contribute to the sustainability of the economy.
“Most state financial aid measures are focused on balancing financial flows. However, the lending and investment model of the Business Support Fund not only helps businesses to survive but also contributes to the smooth return of companies, individual sectors and economies to the post-pandemic level,” says VIVA Chief Investment Officer A. Vilkas.
Finances corporate investments
According to A. Vilkas, VIVA’s investment department is constantly working with dozens of companies to address the challenges posed by the pandemic.
“The pandemic situation in the world has led to disruptions in the supply of goods and raw materials, increased prices, companies have contractual obligations to suppliers, partners, employees, many projects are postponed, stopped, so often medium and large companies face a lack of working capital. However, this is only one side of the coin. The other is investments suspended by companies or planned before the pandemic,” says the investment expert.
According to him, companies that have received VIVA funding can target them to corporate investments if planned before the pandemic or necessary to ensure business continuity. VIVA can also finance investments if they help the company return to pre-pandemic levels or if it has lost bank funding due to market uncertainty.
“Companies that are interested in obtaining financing for investments often apply to VIVA. We can help secure the necessary investments but prepare for a smooth post-pandemic period,” says A. Vilkas.
Partners for business and financial market participants
The representative of VIVA notes that large and medium-sized businesses often have to find complex solutions to attract the necessary financing or complete an investment project.
“We can be an important financial partner for both financial market participants and businesses. I am glad that our value is discovered by entrepreneurs themselves and by representatives of banks and private foundations. Financial market participants can contact us to find financial partners for investments, thus increasing the volume of investments and sharing risks. I believe that close cooperation between companies, banks, private equity funds and state institutions in creating the most favourable conditions for business and providing timely, effective and necessary financial assistance must be our daily routine, not a paper goal,” says VIVA Chief Investment Officer Artūras Vilkas.