Custom content announcement – Finbee advertising
“Lithuania reached a new entrepreneurship record in 2025 –
almost 17 thousand new companies were registered (4% more than in previous
years). Thousands of new businesses established annually require financing, but
not all business creators successfully receive it.
A study on business financing in the European Union
published by the European Commission (EC) revealed that Lithuania rejects the
most applications for financing from small and medium-sized businesses.
Lithuania and Estonia are the only EU countries where even 1/3 of companies do
not receive all the requested bank financing.
According to the data of a study on the access of companies
to financing commissioned by the EC and the European Central Bank (ECB), as
many as 36% of financing applications submitted by small and medium-sized
businesses are rejected in Lithuania.
Although many believe that the main problem preventing them
from receiving vital funds is the lack of a business history, practice shows
that loan applications are rejected for other reasons – insufficient
preparation, errors in documents or an unconvincing business model.
Let’s analyze the most common mistakes and how to avoid
them.
1. Unprepared or too weak business plan
One of the latest scientific studies, which examines
practical insights into creating a business plan, states that a business plan
is a strategic planning tool, the main tool that helps to obtain financing, and
an instrument of communication with investors.
And one of the most common reasons why loan applications are
rejected in Lithuania is an insufficiently substantiated business plan. Many
novice entrepreneurs pay too much attention to the idea, but financiers want to
see more data:
market analysis,
competitor assessment,
customer attraction plan,
financial forecasts,
assessment of possible risks,
many – and at least the history of business activities for
the first 3-6 months. It usually becomes a decisive factor in helping to obtain
a loan.
In practice, situations often arise when the business plan
and the first investments are based on optimistic assumptions, but no arguments
are provided as to why and how the projected sales are expected to be achieved.
What matters to financiers is not the idea itself, but the ability to turn it
into a profitable business.
2. Income projections that are far from reality
Start-up entrepreneurs often overestimate future income and
underestimate costs. For example, they plan to make a business profitable in
just a few months, while similar projects on the market take a year or longer
to “break in.”
A 2025 study found that overly optimistic expectations can
lead to poorer capital allocation, and false expectations reduce efficiency.
Evaluators are quick to spot overly optimistic projections.
If the numbers seem unconvincing or are not based on market data, the
application may be rejected and the business loan may not be granted, even if
the business idea itself is evaluated positively.
3. Only banks are approached, alternative financiers are not
evaluated
A large number of entrepreneurs make the mistake of looking
for financing only in banks. Although banks often offer competitive terms, they
also apply strict requirements for business history, income and
creditworthiness. As a result, young businesses, having received a negative
answer, mistakenly believe that there are no more financing options.
However, before submitting an application, it is worth
analyzing the offers not only of banks, but also of other market participants.
Today, there are various finance companies, peer-to-peer lending platforms and
specialized business financiers, who often evaluate recently established
companies more flexibly.
When comparing the best business loan offers in 2026, it is
important to pay attention not only to the interest rate, but also to the
extent to which financing is available to young businesses.
It is also recommended to choose only reliable business loan
providers, such as Finbee, which clearly present all financing conditions and
have a good reputation in the market.
“Over more than 10 years of operation, we have become
convinced that clarity is the most important thing for business. Therefore,
clients see all financing conditions, payment schedules and the total cost of
the loan even before making a decision,” says Tomas Mačiulaitis, head of Finbee
Verslui.
4. Insufficient own contribution or financial guarantees
Although various financing instruments are available to
young businesses, in most cases financiers expect the business founder to
contribute his own funds to the project.
It is often required that about 10-30% of the value of the
investment project be made up of his own contribution, as this demonstrates the
entrepreneur’s commitment and reduces the risk assumed by the financier.
Collateral, suretyship or other financial guarantees may
also be assessed, although not all financiers require them. Even in cases where
loans are provided without collateral or state guarantee programs are used,
financiers take into account the overall risk of the project, business
prospects and the founders’ readiness to successfully carry out their
activities.
For this reason, insufficient own contribution or lack of
financial guarantees may hinder obtaining financing.
Finbee business loans are provided without any collateral,
often only with partial guarantee. This is one of the biggest advantages of the
Lithuanian loan market.
“Practice shows that the collateral requirement is still one
of the main obstacles to business obtaining financing. Therefore, more
flexible, but, of course, responsible solutions, which we can often offer in
cooperation with ILTE or EU funds, allow us to focus more on business growth,
rather than on finding additional guarantees,” says Tomas Mačiulaitis, head of
Finbee Verslui.
5. Inaccurate or incomplete documents
At first glance, this may seem like a trifle, but inaccurate
or incomplete documents delay the assessment of the application, and sometimes
even become a reason for rejection.
According to a study conducted by the Bank of Lithuania, one
of the factors that has led to negative changes in small and medium-sized
businesses is the lack of financial literacy: some companies seeking financing
encounter difficulties due to their inability to properly fill out and submit
the necessary documents to financial institutions, incorrectly choose a
financing source or state aid measures, and negligently prepare financial
statements.
The most common mistakes:
financial forecasts not submitted,
missing company establishment documents,
inaccurately filled out application,
insufficiently justified investment costs.
The more uncertainties in the application, the more
additional questions arise for evaluators, therefore it is important to provide
all information clearly and consistently.
6. The amount actually needed is not assessed
Finance providers assess whether the requested amount is
based on the business plan, scale of operations, and projected income.
Sometimes inexperienced entrepreneurs may inaccurately
assess the need for financing, which is why the requested amount exceeds the
real needs of the business.
“If a company requests a large amount, but does not provide
clear calculations of how exactly it plans to distribute the costs, the
application may be considered risky. Those businesses that clearly justify how
the invested funds will be used have a higher probability of receiving
financing. Also, one of the most important evaluation criteria is the company’s
ability to fulfill its financial obligations and repay the loan on time,”
shares Tomas Mačiulaitis, the head of Finbee Verslui.
7. Poor experience or competencies of business creators
When evaluating an application, financiers analyze not only
the business idea, but also the people who will implement it.
If entrepreneurs do not have experience in a specific field,
have not assembled a team, or cannot substantiate their competencies, the
evaluation of the application may take time.
This does not mean that a person who is creating a business
for the first time will not receive a business loan. However, projects whose
founders:
have professional experience,
have the necessary education or qualifications,
receive help from partners or mentors,
have already completed the preparatory work are more
trustworthy.
8. Unestimated potential risks
Experienced evaluators are cautious about business plans
that do not include risks.
Every business faces various challenges – competition,
supply chain disruptions, economic changes or changing customer needs.
Therefore, it is important not to ignore or hide potential threats, but to show
how they are planned to be managed.
A clear risk management plan often becomes one of the most
important arguments when making a decision on financing.
How to get a business loan in Lithuania?
So, before applying for a business loan, you should:
prepare a clear and detailed business plan,
base financial forecasts on real data,
plan your own contribution,
take care of all the necessary documents for obtaining a
business application,
inquire about state guarantees and special financing
programs for starting a business.
If a loan application was rejected, this does not
necessarily mean that the business idea is bad. Often it is just a sign that
you need to improve your business plan, adjust your financial calculations, or
better prepare for an interview with a financier.
The more attention you pay to preparation before submitting
an application, the greater the likelihood of receiving a positive decision and
receiving the necessary financing to start a business.
The report was prepared by Finbee. The author of the report
is responsible for the accuracy and legality of the information provided.”
If you did everything according to this advertisement, but
still did not receive the money, do not despair - a discounted pork shoulder
awaits you at Maxima.
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