Commission and European Investment Fund unlock €8 billion in finance for 100,000 SMEs
The European Commission has unlocked €1 billion from the European Fund for Strategic Investments (EFSI) that will serve as a guarantee to the European Investment Fund (EIF), part of the European Investment Bank (EIB) Group. This will allow the EIF to issue special guarantees to incentivise banks and other lenders to provide liquidity to at least 100,000 European SMEs and small mid-cap companies hit by the economic impact of the coronavirus pandemic, for an estimated available financing of €8 billion.
The €1 billion unlocked from the EFSI under the COSME Loan Guarantee Facility and the InnovFin SME Guarantee under Horizon 2020 allows the EIF to provide guarantees worth €2.2 billion to financial intermediaries, unlocking €8 billion in available financing. The guarantees will be offered to the market via a call for expressions of interest issued by the EIF on the 7th April to several hundred financial intermediaries, comprising banks and alternative lenders. Key features of these guarantees will be:
- Simplified and quicker access to the EIF guarantees;
- A higher risk cover – up to 80% of potential losses on individual loans (as opposed to the standard 50%);
- Focus on working capital loans across the EU;
- Allowing for more flexible terms, including postponement, rescheduling or payment holidays.
For further information, please refer to the European Commission website. © European Union, 1995-2020