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EIF and PMV step up support for Belgian SMEs hit by Covid-19 with EU backing

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    Date: 01 December 2020
  • In view of Covid-19 pandemic, PMV increases size of two EIF-facilities to make more financing available for Flemish SMEs that have been affected by the ongoing economic fallout.
  • InnovFin SME Guarantee Facility will increase by up to €120 million in emergency lending for innovative SMEs and Mid-Caps. COSME guarantee will increase by an additional €75 million, to increase access to finance for Flemish SMEs – in total €195 million extra for SMEs.
  • The EIF’s guarantees for Covid-19 support were made available by the European Commission under the European Fund for Strategic Investments (EFSI) and Horizon 2020.

The European Investment Fund (EIF) is increasing two of its guarantee facilities with Flemish promotional institution Participatie Maatschappij Vlaanderen (PMV), to make more financing available for Flemish SMEs and small Mid-Caps. PMV sees additional need in the market, due to the economic fallout of the Covid-19 measures, and will significantly increase its emergency lending capabilities through the two guarantee increases.

The EIF has increased its InnovFin SME Guarantee Facility, financed under Horizon 2020 and the Investment Plan for Europe, by €120 million, to reach a total guaranteed portfolio size of up to €145 million, thus significantly enhancing its firepower in the segment for innovative SMEs and small Mid-Caps.

PMV will also see the size of its portfolio of lending to SMEs under the COSME guarantee, backed under the Investment Plan for Europe, increase by an additional €75 million to a total guaranteed portfolio size of €200 million. Thus improving emergency access to finance for Flemish SMEs.

"The increased guarantee-facility really makes a difference for the Flemish entrepreneur: thanks to this extension we can offer a deferred interest rate of 3% for the corona-loan we issued with a credit amount up to and including 150,000 euros", says Michel Casselman, general manager of PMV. “With this 3-year subordinated loan, PMV created a medium-term financial buffer to mitigate the effects of the corona crisis for Flemish companies. The corona-loan is a supplement to the guarantees for bank bridging loans created by the federal government. It was created after the Flemish government expanded PMV's financial strength to establish an arsenal of resources to guide Flemish companies through the corona crisis.

Thierry Breton, European Commissioner for Internal Market, added: “Through the coronavirus support under the COSME Loan Guarantee Facility and the InnovFin SME Guarantee Facility the Commission and the EIF have made immediate liquidity available to micro, small and medium-sized companies. During this very challenging time for many businesses, especially small ones, we are fully mobilized to support Belgian companies to get swift access to finance for their recovery.”

EIF Chief Executive Alain Godard added: “Now is the time to show the necessary flexibility to support European businesses in any way we can. PMV is a longstanding partner of the EIF and EIB, and under our Covid-19 measures, they will be able to grow their various portfolios to a total availability of €345 million of emergency lending for different types of businesses. Europe is there when you need it, and this is just one example of that.

The two increases are part of the EU measures to support European businesses hit by the Covid-19 pandemic. Among other things, the COSME facility will have an increased guarantee rate to take some of the burden on financing away from the intermediary and final beneficiaries, whereas the InnovFin facility will see more flexibility in the eligibility criteria that would allow more support to those final beneficiaries affected by the Covid-19 crisis.

 

Background information:

COSME is the EU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (SMEs) running from 2014 to 2020 with a total budget of €2.3 billion. At least 60% of the programme is devoted to improving access to finance for SMEs in Europe, with two financial instruments. The COSME Loan Guarantee Facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance to SMEs. COSME Equity Facility for Growth helps provide risk capital to SMEs mainly in the expansion and growth stages. Businesses can contact selected financial institutions in their country to access EU financing: http://www.access2finance.eu/.

InnovFin SME Guarantee provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve access to financing for innovative SMEs and small mid-caps. The facility is managed by EIF under Horizon 2020, the EU Framework Programme for Research and Innovation, 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 EIF against a proportion of their losses incurred on the debt financing covered under the facility. As part of the policy response to address the economic disruption caused by COVID-19, thanks to a top up from the European Fund for Strategic Investments (EFSI), the facility was amended to facilitate the availability of finance to businesses, in particular liquidity facilities and working capital finance (“SMEG COVID-19 Support”).  

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.

The Flanders Participation Company is a “do and dare” company that is shaping the future of the Flemish economy. It provides funding for promising businesses, from the day they first open their doors, through their various growth stages and even on to operating internationally. PMV offers bespoke financial solutions to all companies with a good business plan and a strong management team – providing capital, loans and guarantees. It also implements projects, working with and for the government, and other partners, that are important for prosperity and wellbeing in Flanders. PMV manages a portfolio of €1.2 billion.

 

Press contacts:

EIB: Tim Smit, +352 691 286423, t.smit@eib.org

European Commission: Flora Matthaes, +32 460 755148, flora.matthaes@ec.europa.eu

PMV: Frank Kindt, frank.kindt@pmv.eu, +32 472 420 790.

 

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