Supporting European companies
Small and medium-sized enterprises are essential for national economies. Supporting them is part of a comprehensive package put together by the Commission and the European Investment Bank Group. The Commission has unlocked €1 billion from the European Fund for Strategic Investments to serve as guarantee to the European Investment Fund in incentivising local banks and other lenders to provide liquidity to at least 100,000 European businesses.
On 6 April 2020, the Commission announced that financing of an estimated €8 billion would be made available to provide immediate financial relief to small and medium-sized enterprises across the EU. In December 2020, the Commission found that the creation of a €25 billion Pan-European Guarantee Fund, managed by the European Investment Bank to support companies affected by the coronavirus, was in line with EU state aid rules. The Fund is expected to mobilise up to €200 billion of additional financing to support businesses affected by the coronavirus outbreak in participating Member States.
Examples of support
Bulgaria
On 6 October 2020, the European Investment Fund and Raiffeisenbank signed a €10 million guarantee agreement to support small and medium private and public enterprises in the cultural and creative sectors in Bulgaria.
The agreement provides loans with better terms and conditions to small and medium enterprises affected by the coronavirus crisis, helping then to sustain jobs.
Denmark, Sweden, Norway, Finland and Iceland
On 1 February 2021, the European Investment Fund and the Danish alternative finance provider REinvent Finance signed a guarantee agreement to provide new financing to Nordic film and TV series industry operators facing difficulties due to the coronavirus pandemic. The agreement, backed by the European Commission under the Cultural and Creative Sectors Guarantee Facility and the European Fund for Strategic Investments, envisages a total guarantee amounting to up to €26 million expected to support 60 transactions in the film and TV series industry in Denmark, Sweden, Norway, Finland and Iceland, thus supporting Nordic creative content dissemination. The financing is available through bridge financing loans, minimum guarantees and content development loans through the finance provider.
Estonia, Latvia, Lithuania and Finland
On 14 October 2020, thanks to a €6 million guarantee from the European Investment Fund, financial support was also earmarked for SMEs from the cultural and creative sectors in Estonia, Latvia, Lithuania and Finland.
The guarantee, the first Cultural and Creative Sectors Guarantee Facility in these countries, was granted to Estonian lender Finora Capital, a fully digital, alternative finance providing company.
The scheme gives companies access to more affordable loans, and enables Finora Capital to
- develop a new product matching the specific needs of small and medium enterprises in the cultural and creative sectors
- develop competences in financing the cultural and creative sectors
- expand into new markets.
The agreements were backed by the Commission's Cultural and Creative Sectors Guarantee Facility, and supported by the European Fund for Strategic Investments.
On 31 March 2021, the Commission also proposed to use €4.5 million from the European Globalisation Adjustment Fund to support over 5,000 dismissed tourism workers or self-employed in Estonia.
France
On 7 January 2021, the European Investment Bank Group and BNP Paribas signed a securitisation support agreement to support French small, medium-sized and mid-cap companies affected by the coronavirus pandemic.
The agreement, made within the framework of the European Fund for Strategic Investments, enables BNP Paribas to deploy €515 million in new loans for the next two years, to meet the beneficiaries’ cash flow and investment recovery needs.
Germany
On 30 September 2020, the EIB Group, consisting of the European Investment Fund and the European Investment Bank, agreed with Commerzbank on a new favourable lending scheme, providing up to €500 million to German SMEs.
The financing aims to mitigate the impact of the crisis on smaller businesses, and will allow smaller and mid-cap companies as well as self-employed individuals to continue to operate. This is supported by the European Fund for Strategic Investments, the central pillar of the Investment Plan for Europe, in which EIB Group and the European Commission are strategic partners.
Hungary
On 10 March 2021, the European Investment Fund signed a guarantee agreement with Magyar Vállalkozásfejlesztési Alapítvány to provide €8.2 million in support to Hungarian small and medium-sized enterprises in the cultural and creative sector, to sustain jobs and speed up the economic recovery. The agreement, backed by the European Commission under the Cultural and Creative Sectors Guarantee Facility and the European Fund for Strategic Investments, allows the beneficiary to increase its lending capacity to businesses, and helps smaller media enterprises obtain better access to finance.
Italy
On 19 October 2020, the European Investment Bank Group agreed to provide Italian leasing specialist Alba Leasing €490 million in a securitisation financing operation, unlocking €1 billion in new financial resources to small, medium and mid-cap companies in Italy.
This operation will allow the financing of up to 100% of new investments and projects across all economic sectors, with a particular focus on environmental investments. Around 8,000 SMEs across Italy will receive support to help them recover from the economic crisis caused by the pandemic and to support their green transition.
Malta
On 21 December 2020, the Commission signed an agreement with the European Investment Bank group and the Government of Malta to increase financing available under the SME Initiative in the country, entailing the combined use of European Structural and Investment Funds, the Horizon 2020 programme and European Investment Bank group funds.
This agreement triggered an additional €28 million for financing small and medium enterprises under advantageous terms, such as reduced interest rates and improved collateral requirements, increasing the financing target portfolio in Malta to €118 million.
Romania
On 1 February 2021, the first cooperation agreement between the European Investment Bank Group and Deutsche Leasing Romania unlocked €370 million in private sector financing, to support small and medium enterprises across Romania affected by the pandemic to benefit from cheaper leasing finance. The initiative, backed by a guarantee from the European Fund for Strategic Investments, aims to increase financing for agricultural and equipment investment, support borrowers in rural areas and less developed regions, and provide an alternative instrument for capital management. The initiative, part of the European Investment Bank Group’s private sector response, intends to enhance the resilience of Romanian businesses to the economic, social and health impacts of the coronavirus pandemic.
Spain
On 20 October 2020, the European Investment Bank Group and Banco Santander in Spain agreed on additional financing on favourable terms to Spanish small, medium and mid-cap sized enterprises affected by the coronavirus crisis.
Backed by the European Fund for Strategic Investments, the main pillar of the Investment Plan for Europe, the agreement earmarked over €900 million to support the economic recovery of Spanish businesses. The financing had specific focus on investments into innovation, digitalisation and climate change mitigation and adaptation.
Additionally, the European Investment Bank granted €270 million euro under three agreements to Banca March, to further support Spanish companies affected by the pandemic. One of the agreements is the first supported by the European Investment Bank under the Pan-European Guarantee Fund, while another, under the European Fund for Strategic Investments, provides Banca March with a guarantee of €70 million. The agreements allow the mobilisation of over €570 million to promote economic recovery in Spain.
On 31 March 2021, the European Investment Bank joined forces with Banco de Sabadell to increase its capacity to lend to small, medium-sized and mid-cap enterprises. The European Investment Bank earmarked financing of €300 million, allowing the Spanish bank to mobilise a total of €600 million over the following two years. The contribution is backed by a guarantee from the European Fund for Strategic Investments, the main pillar of the Investment Plan for Europe.
On 27 April 2021, the European Fund for Strategic Investments, part of the EU Investment Plan for Europe, announced a €50 million scheme to support Santander Asset Management in providing new long-term financing for small and medium-sized enterprises predominantly in Spain as well as in Portugal. The funding aims to provide alternative financing solutions to companies through leasing facilities, offering support to withstand the crisis and restart their economic activity.