Highly innovative small and medium businesses in Ireland will have access to loans that will be guaranteed by the EU. A fund of €100 million is the first step.
A new deal between the European Investment Fund and Bank of Ireland will allow the bank to lend SMEs in Ireland a total of €100 million, over the next two years. Innovative SMEs can apply for loans of between €300,000 and €7.5 million.
Importantly, all the loans will be guaranteed up to 50% by the European Investment Fund and the European Union (EU).
The loans are part of a “new generation of financial instruments supported under Horizon 2020, the EU’s Framework Programme for Research and Innovation”.
Ireland is the fastest-growing economy in the EU. SMEs, which would traditionally be regarded as highly innovative but also high-risk, need speedier access to credit to grow. The InnovFin SME Guarantee is a step towards this.
“In 2014, Ireland was the fastest-growing economy in the EU, but there is further scope for domestic growth,” says Carlos Moedas, European Commissioner for Research, Science and Innovation. “This first agreement under InnovFin SME Guarantee shows the EU supports this objective by facilitating investment in SMEs, the biggest job creators in Ireland and across the EU.”
What is the InnovFin SME Guarantee?
The InnovFin SME Guarantee provides guarantees and counter-guarantees on debt financing of between €300,000 and €7.5 million, to improve access to debt finance for highly innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The InnovFin SME Guarantee is implemented by the European Investment Fund, and will be rolled out through financial intermediaries (banks and other financial institutions) in the EU Member States and associated countries. Under the InnovFin SME Guarantee, financial intermediaries will be guaranteed by the EIF against a proportion of their losses incurred on the debt financing. InnovFin SME Guarantee is part of InnovFin – EU Finance for Innovators, a new range of EIB Group (including EIF and EIB) products to facilitate access to finance for innovative businesses. This transaction is supported with the financial backing of the European Union under Horizon 2020.
Here are more details.