The European Investment Fund (EIF) and the British Business Bank (BBB) have signed an agreement under the European Commission's InnovFin initiative to help small and medium-sized enterprises (SMEs) in the UK access an estimated GBP 30 million (ca. EUR 35 million) in additional financing. This transaction benefits from the support of the European Fund for Strategic Investments (EFSI), the heart of the Investment Plan for Europe.
This agreement will enable BBB to guarantee bank loans for innovative companies in the UK over the next two years with the support of a counter-guarantee provided by EIF and backed under Horizon 2020, the EU's research and innovation programme. The agreement will assist SMEs that would otherwise not have had access to the finance they need to innovate, expand or create jobs.
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: “Today’s agreement is excellent news for those innovative SMEs who would not otherwise have had the opportunity to obtain the finance they need to grow and create jobs. I am delighted that the Investment Plan is there to support them as they take their next steps.”
Commenting on the signature, EIF Chief Executive Pier Luigi Gilibert said: “In the current economic climate, there is undeniably a great need to provide SMEs, the backbone of European economies, with the financing they need to grow and create jobs. I therefore welcome this new InnovFin agreement with BBB which will greatly benefit innovative SMEs active in the manufacturing and technical sectors.”
Keith Morgan, CEO of the British Business Bank, said: “At the British Business Bank, we are committed to increasing the volume and diversity of funding available to smaller UK businesses looking to grow. We are delighted to have confirmed this new agreement which will enable us to increase our range of support for innovative and ambitious smaller businesses across the UK.”
This new transaction with BBB reflects the EU's commitment to rapidly launch concrete initiatives under EFSI, significantly accelerating lending and the guaranteeing of transactions capable of boosting jobs and growth in the EU.
The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. More information on EIF's work under EFSI is available here.
About the British Business Bank
The British Business Bank is the UK’s national economic development bank. Established in November 2014, its mission is to make finance markets for smaller businesses work more effectively, enabling those businesses to prosper, grow and build UK economic activity. Our remit is to design, deliver and efficiently manage UK-wide smaller business access to finance programmes for the UK government.
The British Business Bank is currently supporting over 51 000 businesses, working through its 90 finance partners. Its programmes support over GBP 3.2 billion of finance to UK smaller businesses and participate in a further GBP 4.6 billion of finance to UK small mid-cap businesses.
As well as increasing both supply and diversity of finance for UK smaller businesses through its programmes, the British Business Bank works to raise awareness of the finance options, including debt finance, available to smaller businesses. It has published the Business Finance Guide (in partnership with the ICAEW, and a further 21 business and finance organisations). This guide impartially sets out the range finance options available to businesses – from start-ups to SMEs and growing mid-sized companies. Take the interactive journey or download/print a copy at www.thebusinessfinanceguide.co.uk/bbb.
British Business Bank plc is the holding company of the group operating under the trading name of British Business Bank. It is an economic development bank wholly owned by HM Government which is not authorised or regulated by the Prudential Regulation Authority (PRA) or the Financial Conduct Authority (FCA). The British Business Bank operates under its own brand name through a number of subsidiaries, one of which is authorised and regulated by the FCA. More information, including a legal structure chart for British Business Bank plc and its subsidiaries, can be found on the British Business Bank website.
The new InnovFin SME counter-guarantee agreement has been signed between EIF and British Business Finance Limited, a subsidiary of British Business Bank plc (BBB).
About the Investment Plan for Europe
The Investment Plan focuses on strengthening European investments to create jobs and growth. It does so by making smarter use of new and existing financial resources, removing obstacles to investment, providing visibility and technical assistance to investment projects. The Investment Plan is already showing results. The projects and agreements approved for financing under EFSI so far are expected to mobilise over EUR 168 billion in total investments across 28 Member States and to support more than 387 000 SMEs. On 14 September 2016, the European Commission proposed extending EFSI by increasing its firepower and duration as well as reinforcing its strengths. Find the latest EFSI figures by sector and by country here. For more info, see the FAQs.
The InnovFin SME Guarantee Facility is established under the “EU InnovFin Finance for Innovators” initiative developed under Horizon 2020, the EU Framework Programme for Research and Innovation. It provides guarantees and counter-guarantees on debt financing of between EUR 25 000 and EUR 7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by the EU and EIF against a proportion of their losses incurred on the debt financing covered under the facility.
EIF: David Yormesor
Tel.: + 352 24 85 81 346, E-Mail: firstname.lastname@example.org
European Commission: Enda McNamara
Tel.: + 32 (0)2 29 64 976, E-Mail: email@example.com