The Creative Europe programme has set up a Guarantee Facility, to enhance the access to finance of SMEs in the cultural and creative sector (CCS), operational as of 2016. It will support the scaling up of cultural and creative projects and help the sector in becoming more competitive.

A new financial instrument for SMEs

The European Commission has designated EUR 121 million to provide a guarantee facility to the cultural and creative sector (CCS) through the Creative Europe Programme. The launch of the guarantee facility took place on 30 June 2016.

To further strengthen the cultural and creative sector in Europe, the Cultural and Creative Sectors Guarantee Facility received an additional EUR 60 million, in December 2017, through the European Fund for Strategic Investments (EFSI). Following this top-up, the size of Guarantee Facility will increase from EUR 121 million to EUR 181 million, expecting to generate more than EUR 1 billion in loans for thousands of cultural and creative SMEs.

Access to finance is more challenging for Small and Medium Enterprise (SMEs) in the cultural and creative sectors than for conventional SMEs. Some of the reasons are the intangible nature of their assets and collaterals, the limited size of the market, and the lack of training (on the part of financial intermediaries) to address the sector's specificities.
In 2013, the financing gap in the CCS for the 2014-2020 period was estimated to amount to EUR 1.1 - EUR 1.9 billion per year if not action was taken. The study showed that up to 476,000 SMEs in the CCS were to miss on loans due to a lack of collateral only.

How does the CCS Guarantee Facility work?

To encourage the creation of portfolios, the European Commission has committed to partially cover financial intermediaries' potential losses when they engage with CCS projects. Coverage will reach up to 70% of individual loans' losses and up to 25% for portfolios using two models:

  • the provision of guarantees to financial intermediaries to cover portfolios of loans
  • the provision of counter-guarantees to Guarantee Institutions giving guarantees to financial intermediaries to cover portfolios of loans or project-based loans.

In addition to the guarantee in place, the European Investment Fund will also contract a capacity-building provider to train financial intermediaries, with a view to increasing their understanding of CCS peculiarities.

What can the financial intermediaries offer?

A variety of financial products can be proposed by the financial intermediaries: investment in tangible or intangible assets, business transfers, or working capital.

What are the benefits for financial intermediaries and CCS SMEs?

The facility would offer the possibility to build diversified and risk-mitigated portfolios of loans to financial intermediaries wishing to engage with CCS initiatives. In addition, intermediaries would have the opportunity to brand themselves as "the CCS financial intermediary" in their respective markets.

As far as the cultural and creative SMEs are concerned, they will more easily access loans since financial intermediaries will be trained to understand and address their specificities. In addition, SMEs will take this opportunity to improve their business plan and structure.

Who is eligible?

Financial intermediaries are able to submit an application to an open call of expression of interest that will remain open during the whole duration of the programme. Once a financial intermediary is operating under the facility in its market, companies active in the cultural and creative sector, located in the EU as well as Iceland and Norway and responding to the definition of small and medium-sized enterprises will be able to apply for a loan or a guarantee by approaching the financial intermediary operating in its market.

Eligible activities are market or non-market oriented, disregarding the type of legal structure that carries them out. Such activities include the creation, production, dissemination and preservation of goods and services which embody cultural, artistic or creative expressions. The sector includes architecture, archives and libraries, artistic crafts, audiovisual (including film, television, video games and multimedia), cultural heritage, design, festivals, music, performing arts, publishing, radio and visual arts.

Where can I find out more?

More information on countries entering the scheme and selected financial intermediaries will be posted on this page. For additional details, refer to the Creative Europe Programme, EU Access to Finance portal and the presentation of the guarantee facility.

Read more about the first guarantee agreements signed in: