Access to finance

Validation date: 06/2011

Overview

EU financial support for small companies is two-fold: indirect and direct. Indirect support means better access to regular business investments and working capital, while direct support mostly co-finances project activities.

Indirect support

This support is provided through financial intermediaries, which combine EU funding with their own products and services. Though it is not given directly to individual businesses, it helps small companies finance investments. Types of indirect support include guarantee schemes and equity finance.

Indirect support is channelled through the EU's Competitiveness and Innovation Framework Programme (CIP), and more specifically the Entrepreneurship and Innovation Programme (EIP).

The CIP financial instruments are managed on behalf of the European Commission by the European Investment Fund, which directly cooperates with financial intermediaries such as banks, guarantee societies, risk capital funds and other financial institutions. These bodies have to demonstrate that they are taking an additional risk in comparison with their usual practices.

In 2007-13, more than €1 billion will be injected into the EU market via financial intermediaries. The CIP financial instruments are expected to reach around 300 000 companies.

Also distributed through financial intermediaries is the JEREMIE initiative , part of the EU Structural Funds. The initiative improves access to finance for small businesses at national, regional and local level in each EU country. Companies obtain finance through banks and venture capital funds available in the regions. JEREMIE helps national authorities create financial instruments with the support of the European Investment Fund. National and local managing authorities provide information on intermediaries in each region.

Direct support

Companies can apply for direct support - generally in the form of subsidies covering part of a project's cost - from a single point of contact.

Companies apply by responding to a call for proposals. Projects are then evaluated, and successful applicants are granted funding.

Funding for direct support comes from various EU programmes:

Research and development: Seventh Framework Programme (FP7)

Managed by the European Commission, this umbrella programme covers all research-related EU funding.

Around €50 billion is available in 2007-13, of which 15% is expected to benefit small businesses.

Education and training: Lifelong Learning Programme

With a budget of nearly €7 billion for the period 2007-13, the lifelong learning programme provides funding for learning both in the workplace (e.g. Leonardo da Vinci programme) and outside - at all stages of life.

The Education, Audiovisual and Culture Executive Agency manages the centralised action of the programme (the decentralised action being managed by national agencies).

Environment: LIFE+

With a budget of €2.1 billion in 2007-13, LIFE+ provides specific support for environmental and nature conservation projects. The programme is managed by the European Commission.

Energy: Intelligent Energy Europe

This programme funds improvements in the EU energy market, to save energy and promote the use of renewable energy sources. Part of the CIP (2007-13), it has a budget of €730 million.

The Executive Agency for Competitiveness and Innovation manages the projects and events funded under the programme.

Transport: Marco Polo

The programme supports sustainable and cost-effective transport, promoting new solutions such as "motorways of the sea" and anti-congestion measures.

With a budget of €400 million for 2007-13, the programme also covers countries bordering the EU. It is managed by the Executive Agency for Competitiveness and Innovation.

Still need help?

The Enterprise Europe Network provides information and advice to business owners on financing for businesses.

Last update: 22/06/2011 | Top