CIP Loan Guarantee Window

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.

The Product

• Direct guarantees to Intermediaries that provide finance directly to SMEs. EU Loan Guarantees partially cover portfolios of loans, lease agreements or other types of debt finance.
• Counter-guarantees to Intermediaries that issue guarantees for the benefit of lending institutions. EU Loan Guarantees partially cover portfolios of guarantees covering debt finance extended to SMEs.

Main Product Features (applicable both to EU Guarantees and Counter-Guarantees)

• Guarantee rate: for each loan/guarantee in the portfolio, up to 50% of the Intermediary’s commitment.
• Guarantee cap: payments by EIF are capped at a pre-set amount, which is a percentage (known as “cap rate”) of the total amount covered by the EU Micro-Credit Guarantee. The cap rate is based on the expected cumulative net losses incurred by the Intermediary on the EU portfolio. 
• 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: for each financing agreement covered, 10 years from its date.