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Year 2019 continues to show positive trends in the SME sector, with certain ideas for development and further growth that was observed already last year. Companies are careful with their investments and willing to participate in the investment projects with much higher share of their own investment capital. However, they are also considering options to receive financial support, when necessary, in the quickest and easiest way not to hinder further development. This year the economy will continue to grow, yet, despite the positive forecasts for this year, entrepreneurs should be prepared to face labour shortage and to implement alternative solutions by optimizing processes.
Outlook for 2019 continues to be positive for entrepreneurs
“During the last year we have given a lot of consultations about various projects aimed at business development, which lets us assume that entrepreneurs see further opportunities for long-term development. One of the factors promoting positive sentiment is the vast availability of support funds from the European Union last year. The effort put and interest shown in investments last year will definitely allow reaping the rewards this year,” speculates Mareks Gurauskas, Head of Luminor SME Division.
A positive aspect is the fact that entrepreneurs also make investments partially from their own funds, which, despite the optimistic outlook for the future, shows their prudence and pragmatic approach. Hence the bank only gets involved as a partner who helps to assess the chosen solution or required investments.
The challenge is still there this year – process automation and workforce attraction
“Considering the areas which entrepreneurs should focus on this year, emphasis is definitely on the workforce. Its costs are constantly increasing, whereas unemployment has hit an all-time low. For this reason many entrepreneurs admit that labour shortage is one of the main obstacles at the moment along with the fact that specialists do not have appropriate knowledge, competence or qualifications,” Mareks Gurauskas points out. It means that entrepreneurs must think how to optimize processes taking into account that the lack of workforce will still have its impact in the nearest future. Industrial companies are still calculating their expenditure in respect of automation of manual labour, that way creating higher efficiency and better quality, which is very important for business development.
Appreciation of a quick and easy option of getting the required support
“We see that it is important for companies to obtain financial resources for development right now in a simple and fast way, hence we offer a mortgage-free loan for small and medium enterprises, which is easy to apply for and helps to get the money literally within a week. Customers highly appreciate this possibility, and obviously such support is useful for their business because in nine months’ time we have already disbursed almost half of the loan amount envisaged for two years,” M. Gurauskas shares Luminor's experience.
So far a mortgage-free loan has already been used by 97 SMEs operating in different regions and industries, amongst them both service providers and production companies. The purposes of loan are also different – from repairs of premises up to substantial investments in developing investment plans and acquisition of production equipment. Experience shows that often the main argument why businesses use this type of loan is not the mortgage-free option but the fact that it is easy and quick to apply so that they get the required funds within a short period of time which then can be used in developing their business. It also helps in situations when an entrepreneur cannot afford to buy specific equipment, especially brand-new machinery, and acquisition of any other type of funding is difficult. Likewise, this support programme may be used in situations when investment is required for setting up a new trading venue – both, for arranging premises and investing in current assets for company’s development.
Videos of entrepreneurs’ success stories about the Altum support programme may be found below or on Luminor Latvia dedicated Youtube account.