The SME Guarantee Facility is funded with the budget of the European Community which carries certain non-negotiable requirements and restrictions. The main ones are summarised on this page for information.

• Enhanced Access to Finance (Additionality)
• Promotion and Visibility
• Monitoring, Control and Audit
• Compliance with State Aid regulations
• Reporting

Enhanced Access to Finance (Additionality)

EU Guarantees have the objective of increasing and improving access to finance for SMEs. Therefore, they cannot simply replace support for SMEs which already exists: they are intended to stimulate additional benefits. Each EU Guarantee is granted against an express undertaking by the Intermediary to strive to improve SME access to finance (for example, by financing more SMEs, or by lowering collateral requirements or interest rates). return to top

EU Guarantee cover is linked to this undertaking: it increases with the added value effect. If the undertaking is not fully met, cover is reduced and, if the undertaking is not met at all, cover will not become effective. In addition, EIF may charge commitment fees if, at the end of the pre-agreed period, the Intermediary has not fully met the undertaking for Enhanced Access to Finance (commitment fees are not applicable to the Micro-Credit Guarantee Window). return to top

Promotion and Visibility

It is essential that SMEs are aware of the EU support. EU Guarantees are granted against an undertaking by the Intermediary to respect certain promotion-related obligations.
In particular, Intermediaries must provide a link with information for SMEs to a new website to be created on behalf of the European Commission. This requirement is a condition precedent for entering into an EU Guarantee. (This is not applicable to the CIP Securitisation Window). return to top

Monitoring, Control and Audit

The EU budget is tightly regulated to ensure its correct use. Therefore, all entities involved in an EU Guarantee acknowledge that the European Court of Auditors, the European Commission and its agents (including OLAF) have the right to access information and premises. Each agreement relating to the EU Guarantee must contain a standard clause evidencing this right.
EIF will also carry out regular monitoring visits to each Intermediary, in which the European Commission may participate at its discretion. return to top

Compliance with State Aid regulations
Given the public nature of the funds used in the SMEGF, their use must be compatible with the applicable laws on State Aid. Further information is available on the European Commission’s website on State Aid. return to top

Reporting
Intermediaries are required to report regularly on the instruments included in the guaranteed portfolio and the SMEs beneficiaries of the financing, such as:

• SMEs’ country, region, date of establishment, sector of principal activity.
• SMEs’ current number of employees and expected increase.
• Information about the underlying guaranteed financing (investment cost, loan/other financing amount, purpose of financing).
• Figures on the Facility’s utilisation (e.g. number and amount of financing/guarantees issued in the period, total outstanding amount). return to top