TOP 5 Myths About Business Financing in Latvia

Introduction

Securing financing in Latvia is surrounded by myths. Many entrepreneurs don't apply or make bad decisions because they believe inaccurate information that has dominated the market for years.

In this article, we bust the five most common myths and show how things actually are.

Myth 1: "Businesses don't get financed in Latvia"

Truth: Latvia has dozens of banks and financial institutions actively looking for companies to finance.

The market includes:

• 4 large commercial banks
• 10+ smaller banks and credit unions
• 30+ alternative lenders and platforms
• ALTUM with state support programs
• EU fund instruments

The problem isn't "lack of money." The problem is – do you know where and how to apply correctly.

We work with 50+ lenders and know who's looking for what.

Myth 2: "Borrowing = risk"

Truth: The risk isn't in borrowing. The risk is in not knowing what you're doing.

Simple math:

• If your profit margin on capital is 15%
• And the financing rate is 8%
• Then every unused euro = 7% lost profit

Not using capital when you can use it profitably is more expensive than borrowing.

Financing is a tool, not a risk.

Myth 3: "Borrow money when you need it"

Truth: The best terms come when you don't need the money.

Banks assess risk. Risk is lower when a company has:

• balance sheet in order
• stable cash flow
• good recent results

When money is not urgently needed, you can calmly compare offers and get a larger amount with a lower rate.

Practical tip: start financing conversations 6–12 months before you actually need the money.

Myth 4: "Bank said no = it's over"

Truth: 1 bank = 1 opinion.

Every lender has their own criteria. What doesn't fit one fits another.

We regularly see situations where, after proper application preparation, a company receives 2–3 offers from other institutions – often with better terms.

Myth 5: "I can find the best offer myself"

Truth: You can. But it will cost you.

• Time – on average 4–5 months
• Suboptimal offers – without negotiation experience
• Missed opportunities

Financing isn't just the rate. It's a combination: rate + term + structure + collateral + flexibility.

Conclusion

• Money in Latvia exists. You need to know where and how to ask.
• Borrowing isn't risk. Inaction is often a greater risk.
• The best time for financing is now.
• Rejection isn't the end.
• You can do it yourself, but it will cost you.

Contact us to separate myths from reality in your specific situation.