Small and Medium-sized Enterprises faced with limited access to finance, worsened by tightening credit conditions, are continuing to be supported by EU guarantees provided by the EIF to banks, guarantee institutions and microfinance providers.
New and existing business are being financed by a range of financial institutions - from micro-finance institutions to commercial banks under the European Commission funded CIP. This EU budget provides guarantee support to start-ups, small enterprises and established SMEs, for medium to long term investment loans, linked working capital financing and mezzanine financing. The guarantee is provided for free and expands the risk capacity of the financial institutions, enabling them to provide enhanced access to finance.
Chief Executive Richard Pelly said "The EIF is delighted to be working with financial institutions extending the access to finance for SMEs. We are looking forward to providing guarantees for further partners on board in the coming months.
"By offering SME guarantee facilities to financial intermediaries we can help to provide much needed finance especially at a time when businesses are facing difficult funding conditions."
The EIF manages an allocation which is split between venture capital (the High Growth and Innovative SME Facility (GIF)) and guarantees (the SME Guarantee Facility (SMEG)) within the framework of the CIP.
Under the SMEG, financial institutions are obliged to increase the access to finance for SMEs. The facility offers an excellent tool for approving financing volumes for those SMEs which would not otherwise have access to finance because of the increased lending risk entailed. The SMEG also complements and broadens EIF's own product offering, of venture capital investment and loan portfolio guarantees.
The EU CIP SMEG Facility gives the EIF the opportunity to play an essential role in supporting sustainable job creation and entrepreneurship in European SMEs.
About EIF
The EIF central mission is to support Europe's SMEs by helping them to access finance. EIF designs and develops venture capital and guarantees instruments which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. The EIF commitment in guarantees totalled over EUR 13bn in some 200 operations, positioning it as a major European SME guarantees and securitisation actor and a leading micro-finance guarantor.
The EIF does not finance SMEs directly, but always acts through financial intermediaries. It intervenes through venture capital and guarantee instruments.
For further information, please visit http://www.eif.org.