Facilitating European SMEs' Access to Finance 3 October 2013 Directorate General for Enterprise and Industry of the European Commission Unit D3: SME Access to Finance Astrid Bartels (Policy Officer) 1
EU financial instruments in general Part of the EU instruments for over a decade to support real economy Efficient way of implementing the EU budget as they have leverage / multiplier affects Cover a broad range of interventions Guarantees to mutual guarantee societies and banks lending to companies (including SMEs) Equity participations for early and growth-stage investments Regulatory Framework is set through Financial Regulation, EU Programmes and State Aid rules 2
Common features Aim to improve access to finance, especially for SMEs Typically operated by the European Investment Bank (EIB) Group, but may also be operated by other financial institutions Except for very large projects, typically delivered via financial intermediaries in the participating countries (mutual guarantee societies, banks, funds, etc) 3
Forthcoming EU Programmes containing financial instruments for SMEs (2014 2020) COSME: Programme for the Competitiveness of Enterprises and SMEs Horizon 2020: Research Framework Programme providing financial instruments for innovative companies ad projects Creative Europe Programme: Cultural and Creative Sectors Guarantee Facility 4
Single EU debt financial instrument for EU enterprises' growth and R&I Components: Loan Guarantee Facility (LGF) of COSME targeting SMEs only and securitisation window Risk-Sharing Instrument (RSI) of Horizon targeting SMEs and small midcaps Cultural and creative sectors guarantee facility (start 2016 only) 5
Details of COSME LGF Provides a frame => financial intermediaries can create products suitable for their particular markets (builds on CIP experience) Strict focus on additionality => enhanced access to finance, focus on transactions with higher risk profile Capped portfolio guarantees, free of charge Wide range of interventions => Working capital, investment loans, subordinated loans, bank guarantees, leasing Duration: min. 12 months (transaction) max. 10 years (guarantee) SME financing up to 150,000 for any type of SME > 150 000 financing possible if the SME does not fulfil criteria to be eligible under the Risk Sharing Instrument of Horizon 2020 (RSI) verification through checklist 6
Details of COSME Securitisation The Commission remains committed to the support of SME loan securitisation via the COSME financial instruments The COSME Securitisation Window will enable the securitisation of SME debt finance portfolios to mobilise additional debt financing for SMEs Support for the transactions will be conditional upon an undertaking by the financial intermediary to use a significant part of the resulting liquidity or mobilised capital for new SME lending in a reasonable period of time 7
Details of Horizon 2020 RSI Targeting innovation-drive SMEs and small midcaps Verification of whether enterprise is eligible or not through a checklist of criteria of which only one needs to be fulfilled to document eligibility Envisaged to continue with uncapped guarantees (fee payment) Single transaction up to 7.5 million Demand-driven as a rule Some thematic windows also likely (e.g. climate action) Counter-guarantees offered EIF incentivised to ensure geographic spread 8
Implementation Commission delegates implementation of both facilities to so-called entrusted entity (EIF) Financial intermediaries may apply for only one or several facilities The debt facilities allow pooling of resources with Member States willing to contribute part of their Structural Funds Debt and equity funding may be combined Demand-driven; applications to entrusted entity COSME and Horizon can contribute resources to the joint EU SME instrument 9
Current status and next steps COSME and Horizon 2020 adoption by co-legislator is imminent (expected for October November) Parallel implementation preparations by the Commission are under way Negotiation of terms & conditions / contracts with future entrusted entity Communication: series of EU Finance Days Start of both facilities will be signalled to the market through publication of calls for expression of interest (2014) 10
EU Finance Days 2013-2014 Information campaign: events in all Member States to present the different EU financial instruments Target audience: potential financial intermediaries, Enterprise Europe Network and business representatives Timing (other Member States in 2014): 18 October: Rome, IT 5 November: Vilnius, LT 12 November: Ljubljana, SI 26 November: Lisbon PT (tbc) 10 December: Dublin, IE More information: ec.europa.eu/enterprise/policies/finance 11
EU Finance Portal access2eufinance.ec.europa.eu Existing single information access point CIP, RSI, RSFF, Structural Funds, Progress, EIB/ EIF own resources EU financial instruments mobilised over 100bn in 2007-2013 EU Finance Portal to date Easy and simple access to all EU financial instruments Over 1000 intermediaries in all EU28 and candidate countries Available in 22 languages EU Finance Portal (2014-2020) Further improvements and continuous update Joint effort of Commission services and EIB Group 12
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Thank you for your attention! 14