Resources from the European Commission

The European Commission allocates resources to the EIF under the Competitiveness and Innovation Framework Programme (CIP). The CIP has several schemes and a budget of over €1bn to facilitate access to loans and equity finance for SMEs where market gaps have been identified. They cover different needs depending on the stage of development of the small and medium sized enterprises (SMEs).

• Equity financing: The high growth and innovative SME (GIF)

The GIF's objective is to improve access to finance for the start-up and growth of SMEs, and investment in innovation activities, including eco-innovation. The GIF aims to achieve this objective by contributing to the establishment and financing of SMEs and the reduction of the equity and risk capital market gap which prevents SMEs from exploiting their growth potential, with a view to improving the European venture capital market, and by supporting innovative SMEs with high growth potential, in particular those undertaking research, development and other innovation.

GIF comprises two business lines, GIF 1 and GIF 2.

- GIF 1 covers early stage (seed and start-up) investments in specialised venture capital funds such as early stage fund, funds operating regionally, funds focussed on specific sectors, technologies or research, technologies or research and technical development and funds linked to incubators, which in turn provide capital to SMEs. Co-investments in funds and investment vehicles promoted by business angels is also permitted.

- GIF 2 covers expansion stage investments by investing in specialised risk capital funds, which in turn provide quasi-equity or equity for innovative SMEs with a high growth potential in their expansion phase avoiding buy-out or replacement capital for asset stripping.

EIF  manages the High Growth and Innovative SME Facility (GIF) on behalf of the European Commission. Under the GIF, we invest in specialised funds, which provide venture capital for SME financing. The GIF is funded by the European Union under the European Commission Competitiveness and Innovation Framework Programme 2007-13 (CIP). The GIF's objective is to improve access to finance for the start-up and growth of SMEs, and investment in clean technology or eco-innovation. Under GIF, higher investment rates are allowed in the case of funds focused on eco-innovation. Please note that EIF does not finance SMEs directly.

• Guarantees: The SME guarantee facility (SMEG)

The SMEG provides loan guarantees to encourage banks to make more debt finance available to SMEs, including microcredit and mezzanine finance, by reducing the banks' exposure to risk. SMEG provides co-, counter- and direct guarantees to financial intermediaries providing SMEs with loans, mezzanine finance and equity. An overview of the guarantee activity is available in the guarantees and securitisation section. The main product features of GIF are:

• Nature: Equity or quasi-equity investments in Intermediaries.
• Investor: EIF operates as investor on behalf of the EC.
• Signing period: Fund agreements can be signed until 31 December 2013.
• Duration: Investments typically consist of 5 to 12-year positions in Intermediaries.
• Amount: Commitment to a single Intermediary shall require a critical mass and shall not exceed EUR 30m.

For more information :

• GIF1 Implemenation Guidelines (PDF, 66.8 KB)
• GIF2 Implemenation Guidelines (PDF, 64.7 KB)
• GIF 1 and GIF 2 special EU requirements
• Guiding Paper for investors on eco-innovation
• EC DG Enterprise and Industry online magazine