New EU fundraising rules: boosting venture capital for SMEs and easing access to credit Published on: 07/12/2011
The European Commission is presenting a strategy to promote better access to finance for SMEs with an EU Action Plan which includes increasing financial support from the EU budget and the European Investment Bank and a proposal for a regulation setting uniform rules for the marketing of venture capital funds.
Brussels, 07 December 2011 - Access to finance is essential to enhance the competiveness and growth potential of SMEs. In the context of the current crisis, marked by a fall in lending to the real economy, it is increasingly difficult for such companies to access loans. For this reason the European Commission is presenting a strategy to promote better access to finance for SMEs with an EU Action Plan (see MEMO/11/879) which includes increasing financial support from the EU budget and the European Investment Bank and a proposal for a regulation setting uniform rules for the marketing of venture capital funds.
The new regulation will make it easier for venture capitalists to raise funds across Europe for the benefit of start-ups. The approach is simple: once a set of requirements is met, all qualifying fund managers can raise capital under the designation "European Venture Capital Fund" across the EU. No longer will they have to meet complicated requirements which are different in every Member State. By introducing a single rulebook, venture capital funds will have the potential to attract more capital commitments and become bigger.
In addition to the measures presented last week, including €1.4 billion of new financial guarantees under the Programme for the Competitiveness of Enterprises and SMEs (COSME (2014-2020) - IP/11/1476), the European Investment Bank will keep its SME loan activity at a sustained pace, close to the 2011 level of €10 billion.
European Commission Vice President Antonio Tajani, responsible for Industry and Entrepreneurship, said: “Easing access to finance for SMEs is priority number one to get out of the crisis. Our Action Plan underlines that Europe is doing its utmost to improve SMEs' access to finance. We aim to strengthen our EU financial instruments for SMEs and to improve their access to finance markets.”
Internal Market Commissioner Michel Barnier said: "We need more venture capital in Europe. By helping companies become more innovative and competitive, venture capital will create Europe's companies of the future. In order to support the most promising start-ups, venture capital funds must become bigger and more diversified in their investments. Today's proposals will help develop this emerging market."