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European financing instruments (loans, guarantees, etc.)

Why to deal with this? Apart from non-repayable, direct grants, the EU offers loans and guarantees for SMEs.

Loans and guarantees shall improve the SMEs access to investment capital. They are indirect support measures, which means that businesses do not receive the Community financing directly but via a financial intermediary which signed agreements with the EU institutions. These financial intermediaries combine the financial instruments provided by EU institutions with their own products and services. It is to be distinguished between CIP financial instruments such as GIF and SMEG, the RSFF, which is supported by the European Bank for Investment and FP7, and regional financial instruments such as JEREMIE. The European Investment Fund (EIF) covers the management side on behalf of the Commission in many of these instruments. As mentioned, it acts through financial intermediaries, banks and investment funds, thereby guaranteeing proximity financing

When is it suitable/applicable? Loans are essential for business establishment or development. European financing instruments come into play when the SME cannot offer sufficient guarantees to obtain a loan. Due to the reluctance of financial institutions to take these risks, the SMEs access to loans is limited. The Community financial instruments are based on the principle of risk-sharing, which means that the EU institutions reduce the banks' exposure to risk with the objective to make more debt finance available to SMEs. They thereby increase the loan facility available to businesses. Loan guarantees are particularly applicable for already established SMEs with growth potential and need for investment capital.
When is it NOT suitable/applicable? Loans and guarantees are repayable, so the expansion potential of the SME should be large enough.
What costs are related to it (financial, time effort etc.)? Calculate time to negotiate the process with your bank (Loans and guarantees are indirect funding instruments. As a consequence, SMEs should always get in touch with the financial intermediaries. They should never contact directly the Commission, the EIB or the EIF)

What’s the relevant HTE output? European funding programmes for SMEs are not in the focus of the Hightech Europe project. However, some of the partners offer innovation services to SMEs in their role as Enterprise Europe Network partners and can put you in touch with the relevant institutions.
Whom can I talk to from the HTE team? ZENIT, SP

Relevant internet links Links:
Online databases and tools Tools:
Where to get advice, consultancy? Support:

- Consultancy services are offered by the Enterprise Europe Network: http://portal.enterprise-europe-network.ec.europa.eu/services/access-finance - Financial intermediaries (banks): http://www.eif.org/what_we_do/where/index.htm

Related innovation sheets Venture capital, Business angels, EU 7th Framework Programme – Cooperation, Financial x pre feasibility, Financial x feasibility, Financial x development, Financial x launching

Title European financing instruments (loans, guarantees, etc.)
Aspect Financial
Latest Version 23-08-2012
Completed by ZENIT


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Created by Hte zenit on 23 August 2012, at 09:28