How it works
The European Commission provides funding to businesses through local financial institutions in EU countries. These institutions, which include banks, guarantee societies or equity investors, determine the exact ﬁnancing conditions – the amount, duration, interest rates and fees. Many types of funding are available, including loans, guarantees and equity funding.
EU co-financing means easier access to financing with extra advantages such as reduced interest rates or less collateral requirements.
The implementation of financing programmes is handled by the major International Financial Institutions: the European Investment Bank (EIB), the European Investment Fund (EIF), the European Bank for Reconstruction and Development (EBRD), and the Council of Europe Development Bank (CEB) in co-operation with the Kreditanstalt für Wiederaufbau (KfW).
- SME Finance Facility (SMEFF)
The objective of the SMEFF is to encourage banks, leasing companies and investment funds to expand and maintain long-term financing of SME operations in the new Member States and certain applicant countries. The SMEFF is managed by the EIB, EBRD, CEB and KfW and consists of two so-called ‘windows’: a loan window providing credit lines from the IFIs combined with incentives for the participating lending institutions, and an equity window providing equity capital.
- High Growth and Innovative SME Facility (GIF)
The GIF is managed by the EIF on behalf of the European Commission and is part of the Competitiveness and Innovation Framework Programme, 2007-2013 (CIP). It comprises two ‘windows’:
GIF 1, which promotes early-stage (seed and start-up) investments through specialised Venture Capital Funds. These provide capital to innovative SMEs and co-invest in funds and other investment vehicles promoted by business angel networks.
GIF 2, which promotes expansion-stage investments through specialised risk capital funds providing equity or quasi-equity for innovative SMEs with high-growth potential.
- SME Guarantee Facility (SMEGF)
Also part of the CIP and managed by the EIF, the SMEGF has four ‘windows’: a loan window providing debt financing via loans or leasing; a microcredit window providing guarantees for funds which gives loans of smaller amounts and grants to partially offset high administrative costs; an equity window providing guarantees for equity or quasi-equity fund investments in SMEs; and a securitisation window providing securitisation of SME debt-finance portfolios.
- Capacity Building Scheme (CBS)
Again under the CIP, the CBS has two parts: a partnership action, which focuses on finance for eco-innovation; and a seed capital action managed by the EIF, which provides grants to venture capital funds to cover in part their start-up costs and for the long-term recruitment of staff with specific investment or technology expertise.
Access to finance
DG ECFIN does not provide direct financial support to individual businesses or entrepreneurs. Those interested should refer directly to the above-mentioned financial intermediaries.
Find out more about the main funding opportunities available for SMEs:
Access to finance