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The aim of the Guarantee is to ensure entrepreneur with obtaining credit resources for commercial activities in situations when with collateral held by entrepreneur is not enough to attract required finance.
Guarantee is an obligation of LGA to repay Commercial Bank compensation for unrequited part of the financing within the amount of the Guarantee. Guarantee Case is considered as occurrence of such conditions which creates Commercial Bank the right to demand repayment of financed amount from the entrepreneur in accordance with the loan contract.
Issuance and state aid granting and the calculation of grant equivalent is determined by Regulation of Cabinet of Ministers  “Regulations on Guarantees for Development of Enterprise and Cooperative partnerships which provide Agricultural Services Competitiveness”
Guarantees are issued for the following financial services:
- Loan for investments;
- Loan for current assets;
- Financial leasing;
- Factoring where debtors are the undertakings and cooperative partnerships which provide agricultural services registered in Latvia and client (undertakings or cooperative partnerships which provide agricultural services) according factoring contract is liable to credit institutions or their subsidiary companies for claim safety.
The aid is refused if there are existing financial obligations, except for cases when aid may be granted if guarantees are issued for Loan for investments or financial leasing for which repayment of the principal amount is postponed at least for a year but not more than for two years.
Guarantee covers up to 80% of the financial service, but one undertaking or cooperative partnership which provides agricultural services does not receive more than EUR 3 000 000 equivalently in LVL according to the exchange rate of the Bank of Latvia on guaranty issue date.
Guarantee period does not exceed ten years for Loans for investments and financial leasing and three years for Loans for current assets and domestic factoring.
Guarantees can be received by the enterprises registered in Republic of Latvia.
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