Irish SMEs to benefit from €100 million in EU-guaranteed loans
Brussels, 23 October 2015
Small and medium-sized enterprises (SMEs) in Ireland will get easier access to risk capital thanks to a new EU-backed loan guarantee facility under the Horizon 2020 programme. A deal signed today by European Investment Fund (EIF) with Bank of Ireland will allow the bank to enter into new loan agreements with SMEs as well as Small Mid-caps for a total of €100 million, over the next two years.
Carlos Moedas, European Commissioner for Research, Science and Innovation, said: "In 2014, Ireland was the fastest-growing economy in the EU, but there is further scope for domestic innovation to grow. This first agreement under InnovFin SME Guarantee is a tangible proof that the EU actively supports this objective by facilitating investment in SMEs, the biggest job creators in Ireland and across the EU."
The loans to finance innovation activities will be guaranteed up to 50% by the European Investment Fund and the European Union (EU) under InnovFin SME Guarantee, which targets early and development stage companies. It is part of the new generation of financial instruments supported under Horizon 2020, the EU's Framework Programme for Research and Innovation (IP/14/670).
InnovFin SME Guarantee Facility provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The facility is managed by the EIF, 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 the EIF against a proportion of their losses incurred on the debt financing covered under the facility.
InnovFin SME Guarantee is part of "InnovFin – EU Finance for Innovators", the new generation of EU financial instruments and advisory services that was developed under Horizon 2020 to help innovative firms access finance more easily. It will help inject up to €48 billion in investments in Research and Innovation across Europe.
About Horizon 2020
On 1 January 2014, the European Union launched a new research and innovation funding programme called Horizon 2020. Over seven years, almost €80 billion will be invested in research and innovation projects to support Europe’s economic competitiveness and extend the frontiers of human knowledge. The EU research budget is focused mainly on improving everyday life in areas like health, the environment, transport, food and energy. Research partnerships with the pharmaceutical, aerospace, car and electronics industries also encourage private-sector investment in support of future growth and high-skilled job creation.