Frequently asked questions

These are the frequently asked questions regarding financing opportunities offered by Capitalia

On business loans

In which situations is business loan suitable?

Capitalia's business loan is medium-term loan to businesses for financing working capital and investment needs. Our financing is particularly tailored for small and medium-sized businesses and it is generally more accessible than loans from banks and other financial institutions. For further information on alternative financing for companies and other useful tools for businesses, please see our resources section (in local languages).

Why choose our financing?

Our financing is typically used in addition to bank financing and in situations where bank financing is not suitable or available. For example, our loans are often used when a business loan is necessary fast and for short term. With our sole focus on servicing small and medium businesses, the financing process of Capitalia is significantly shorter than in other institutions, while necessary documentation and approval process is simplified. We can provide financing to companies in almost any industry.

Does it cost to submit an application for a business loan?

No, loan evaluation is free of charge. Independently of the eventual decision on the financing, costs regarding the evaluation of an application are covered by ourselves. In case of a positive decision, we will ask the client to cover collateral registration (if applicable) and other fees in accordance with our Pricelist.

How the interest rate for the loans is set?

Issue fee and interest rate are determined based on the evaluation of each financing situation. Our proprietary credit risk scoring model is based on over 100 characteristics that determine the financing amount and terms for each of the clients. For repeat clients with good payment history we offer repeat financing at better terms.

What is the possible term for a business loan?

Financing for working capital is provided for a term of up to 1 year while for investment projects - up to 3 years. Irrespective of the agreed loan term, clients can always and without penalties repay the financing prior to the loan maturity date. In situations, when financing is necessary for the short term, we suggest clients check our invoice purchasing product. While for financing loan term investments, clients will find useful our venture capital investments.

Can a client repay the debt before the maturity?

Yes, our loans can be repaid before the term agreed in the loan agreement and we don’t charge any early repayment penalties. However, we will request that the interest amount due for the current month will be paid in full and assigned commission for late payments, if any, will be transferred.

Can a client own multiple active loans with Capitalia?

Yes, clients who have active loans with Capitalia can apply for and receive additional financing to the same or related business. Every client has approved credit limit within which additional financing is freely available. To apply for additional financing and see available credit limit, please visit My Account section at Capitalia’s homepage.

Can a client apply for Capitalia financing with debt from other institutions?

Yes, Capitalia accepts and evaluates loan applications from businesses that already have loans from other credit institutions, for example, commercial banks. Our financing is one of the "courses" in the "financing menu" of businesses and is often used in addition to bank loans.

When does the repayment of loan begin?

Loan amortization and interest payments will typically start in the first month following the receipt of the loan. If required, we may agree on a tailored loan repayment schedule that can include a limited grace period on repayment of the loan’s principal amount.

On invoice purchasing

What is invoice purchasing?

Invoice purchasing is a new financing product that allows businesses to easily manage their cash flow and working capital. Any issued and unpaid invoice can be sold to Capitalia, receiving up to 100% of the invoice amount in the same working day. Furthermore, if you have received an invoice whose payment term you would like to delay, such invoice can be passed to Capitalia that will make payment on your behalf.

Why choose invoice purchasing?

Invoice purchasing can ease your financial planning. To get this financing, typically no additional collateral is required. Invoice purchasing is a simple analog to factoring and credit line, where business can get additional financial resources whenever necessary.

Does it cost to submit an application for invoice purchasing?

No, evaluation of invoice purchasing application is free of charge. Independently of the eventual decision on the financing, costs regarding the evaluation of an application are covered by ourselves. Furthermore, our commissions for the service are simple and transparent in accordance with our Pricelist.

Which invoices are subject of the offered service?

We purchase invoices that are payable by any company in the Baltic States, Sweden, Denmark, Finland, Norway, and Germany. Also we can purchase invoices that are can be insured with respectable insurance companies. Invoice purchasing is not suitable for late invoices. Namely, we purchase invoices only of well-paying customers.

What is the maximum term for invoice payment?

Any invoice with payment due days of at least 15 days and not more than 90 days can be sold to Capitalia. There is not set any smallest accepted invoice size, but a minimum EUR 20 processing fee will be applied to each invoice.

Can a client use the invoice purchasing for various receipts?

Yes, in line with our invoice purchasing agreement an unlimited number of invoices can be sold to us at the same time as long as the set credit limit (stated in agreement) is not exceeded.

What happens when the debtor cannot pay the full amount of invoice?

Capitalia offers invoice purchasing with regress clause, which means that seller of the invoice has to take full responsibility of the payment of the invoice by its client and will cover the invoice amount if the client doesn't. If your client does not pay for the invoice in the due date or pays the invoice partially, the remaining sum is calculated by Capitalia and passed for payment to the seller of the invoice.

On venture capital

What is venture capital?

Venture capital is an investment that is made in the equity capital of a company. Such investment does not carry a fixed interest rate, but investor gains profit by selling the shares of the business in the future. In order to facilitate the growth of the company’s value, venture capital investors seek opportunities to actively help with contacts, advice and other resources. Typically venture capital funds will want to sell their investments in 3-5 years from the investment date.

What is a business angel investment?

A business angel is a private individual that provides financing to a company in return getting an equity share in the business. Such private investors typically invest amounts of up to EUR 50,000 and get involved in relatively early development stages of the company. Capitalia conducts business angel investments together with reputable and professional private investors that after the investment like to take active development role in the companies, helping them grow. Additional information on business angels and venture capital as well as practical suggestions on attracting such financing can be found in our guidebook on alternative finance.

Can venture capital substitute a bank loan?

Venture capital and business angel financing does not replace but complement bank financing products. Often investment from a venture capital fund is a critical factor that persuades also bank to provide a loan to business and to improve terms of such financing. Also, venture capital is suitable for businesses that are not yet profitable and hence often don’t qualify for bank financing.

How fast is the process of getting venture capital?

In the process of providing venture capital investment, Capitalia will want to not only study historic finances of the company, but also get to know management team, understand future strategy and market in which the business operates. As a result, evaluation procedure for venture capital financing can take up to 3 months. In situations, when capital for the business is required sooner, please ask about other financing products of Capitalia.

Other questions

What to do in the case of non-standard loan requirements?

In non-standard situations, we urge clients to contact our client managers and discuss the specifics of the situation. Capitalia has designed and issued a number of nonstandard business loans and we are able to react quickly and be flexible to a client’s requirements. Furthermore, we are able to help clients to raise financing from other sources like venture capital, banks or business angels in situations, when we ourselves cannot provide the full capital amount.

How to submit recommendations or complaints?

We are happy to receive your recommendations and will carefully review any complaints about our work. Please address such letters to email address support@capitalia.com or call our provided telephone number. All complaints are reviewed by the manager of the company and are resolved within 7 days.