Story of SE Capitalia: receiving authorisation and planning for future development
SE Capitalia received Latvijas Banka's authorisation to provide crowdfunding services in November 2023. What development opportunities will this bring?
Road to receiving authorisation
SE Capitalia has financed companies already since 2007 and has managed a lending crowdfunding platform since 2017. During this time, we have financed more than 5000 loans in Latvia, Lithuania and Estonia, and we have serviced companies such as SIA Pure Chocolate, SIA Stenders, SIA Aerodium, SIA Peruza and many others. We applied for authorisation to provide crowdfunding services in order to continue our commercial activity under the common European legislative standards. The company chose to apply for authorisation in Latvia because this is where its head office is located.
The authorisation allows us to step up our efforts in attracting new European investors, including institutional investors such as pension fund managers. With new long-term investors, SE Capitalia will be able to make financing more available to companies and offer them longer-term loans. In times when banks are generally taking a more cautious approach to granting new loans, increasingly more companies are making use of opportunities offered by alternative finance providers.
Cooperation with Latvijas Banka
The process of receiving Latvijas Banka’s authorisation, as well as cooperation with Latvijas Banka, was very professional, supportive and friendly. The representatives of the regulator studied our operational processes with great diligence which also required high precision on our part so that we could adapt the existing corporate financing procedures to the new EU regulation.
Potential for development
SE Captialia offers supplementary funding which companies can use in addition to long-term bank loans. Moreover, we offer financing when bank loans are unavailable or unsuitable, for instance, when a short-term loan is needed. Companies in the Baltic countries have historically relied on the financing products provided by banks, and these products dominate the market. Over the past few years, however, entrepreneurs have become increasingly more aware of alternative funding options such as the issuance of bonds and crowdfunding platforms. They understand that each situation calls for a different type of funding and have become adept at navigating through various financing sources and combining bank financing with alternative types of loans from other companies.
The crowdfunding platform of SE Capitalia has been in use since 2017. During this time, the platform has mediated the financing of loans amounting to more than 65 million euro, and over 900 companies in Latvia, Lithuania and Estonia have received financing for their development. Since the establishment of the platform, the average return for investors has been more than 12 % per year.
Receiving Latvijas Banka's authorisation has opened the way for us to significantly broaden the target audience of our investment platform in the near future. We are planning to do so by reducing the minimum investment threshold and by offering simple, automated tools which anyone can use to make investments in the development of our regional companies.
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Latvijas Banka's commentary
Ingus Valtins, Chief Legal Consultant of the Licensing and Sanctions Department, Latvijas Banka
Capitalia is already the second company to have received Latvijas Banka's authorisation to provide crowdfunding services in accordance with the single European regulatory framework. Latvijas Banka's experience shows that the process of obtaining the authorisation to provide crowdfunding services proceeds smoothly if the company utilizes the pre-licensing process offered by Latvijas Banka and diligently prepares all the necessary documents.
We invite any company seeking to obtain authorisation to provide crowdfunding services to use the Latvijas Banka's licensing guide.
Latvijas Banka’s experts offer advice to prospective market participants to help better understand the regulatory requirements on the process of registering crowdfunding services. Apply for a consultation here.