General Principle

Through the EIF, the EU partly guarantees loans or other debt finance granted by local institutions to SMEs. The risk-sharing arrangements established between EIF and each of its local partners, known as “Intermediaries”, aim to stimulate the provision of debt finance to SMEs at local level.

Please click here to view the Guarantee Policy and Operational Guidelines governing the Loan Guarantees Window.

The Product

Depending on the type of Intermediary and its activity, EIF may issue:

• Direct guarantees to Intermediaries that lend to SMEs. EU Loan Guarantees partially cover portfolios of loans, lease agreements or other types of debt finance (“SME financing”).
• Indirect or counter-guarantees to Intermediaries that issue guarantees for the benefit of lending institutions. EU Loan Guarantees partially cover portfolios of guarantees for SME loans, leasing or other debt finance (“SME financing”).

Main Product Features (applicable both to direct and indirect EU Loan Guarantees)

• Guarantee rate: for each loan/guarantee in the portfolio, up to 50% of the Intermediary’s commitment
• Guarantee cap: payments are capped at a pre-agreed amount, which is a percentage of the total amount covered by the EU Loan Guarantee. The percentage is negotiated with EIF and is based on the expected cumulative losses incurred by the Intermediary.
• Fees: EU Loan Guarantees are provided free of guarantee fees. However, in order to encourage full use of the available budget, commitment fees may be charged.
• Guarantee maturity: 10 years for each SME financing covered.
• SME financing criteria:
  • Borrowers: SMEs as defined by the EU - click here for the SME definition.
  • Purpose of financing: investment loans or leases for the development of the borrower (investments in tangible or intangible assets, or business transfers), working capital.
  • Minimum maturity: 18 months.
    
• Special EU requirements: Given the public nature of the EU Loan Guarantee Window, certain EU conditions apply. Click here for further information about the EU requirements.

Please click here to view the application procedure and download the relevant application information.

Important information for small businesses (SMEs)

Please note that SMEs themselves cannot obtain a guarantee directly from the EIF and should therefore not approach EIF.Information for SMEs about sources of loan finance backed by the European Union will be available on a dedicated website that is presently under construction. Links to this SME-dedicated website will be published on the EIF website in due course.