Access to Finance

EU CONTRIBUTION TO SME FINANCING

The European Commission works both at the policy level, by developing policy and helping EU Member States share good practices, and at the practical level, by designing and implementing EU financial instruments. This is highlighted in the Commission Communication ‘Financing SME Growth – Adding European Value’:

More debt financing: for many years the Commission has been active in bringing bankers and SMEs together in order to identify and reduce the main barriers the latter encounter when looking for finance. For more information, see Loan Financing and Round Tables between Bankers and SMEs.
More risk financing: the provision of risk capital is crucial for the creation and growth of innovative SMEs. The Commission and the Member States are working together to formulate policies aimed at creating an integrated and competitive risk capital market. For more information, see Equity Financing.

The Financial Instruments of the Competitiveness and Innovation Programme (CIP) help SMEs raise equity and debt finance. With a budget of over one billion Euros, the CIP financial instruments should leverage around 30 billion euros of new finance for SMEs. They are mainly managed mainly by the European Investment Fund (EIF):

• the High Growth Innovative Scheme, providing risk capital for innovative SMEs in their early stages (GIF1) and in their expansion phase;

• the SME Guarantee Facility, providing loan guarantees to encourage banks to make more debt finance available to SMEs, including microcredit and mezzanine finance, by reducing the banks’ exposure to risk;

• the Seed Capital Action and the Partnership Action, helping to reinforce the capacity of financial intermediaries to invest in and lend to SMEs

FACTS AND FIGURES

BUSINESS ANGELS Finance
The activity of business angels as venture capital investors is particularly difficult to measure because business angels are informal investors. They are, however, often organised in networks which provide a certain overview over the activity of their members.

VENTURE CAPITAL Finance
The European Private Equity and Venture Capital Association (EVCA) provides annual figures on the developments of private equity and venture capital investments in Europe. Only one part of the investments – particularly in the early stages- are investments in SMEs.