Out-Law News | 05 Aug 2014 | 3:53 pm | 1 min. read
The EIB said the dedicated lending programme for small and medium-sized enterprises (SMEs), that includes a matching contribution from SGEF, is expected to help firms invest in transport and high-tech and industrial equipment “by providing lower cost financing for up to eight years”.
According to the EIB the new lending programme will provide medium and long-term financing and “an alternative to regular bank lending”. Companies will be able to use new equipment as “collateral that reduces risk and has a positive impact on pricing”. The EIB said: “Eligible investment includes commercial vehicles and agricultural machinery, IT, office and medical equipment, production and packaging machines and a broad range of construction equipment.”
EIB vice-president Jonathan Taylor said: “Investment in new equipment is often essential to remain competitive and create new jobs. Financing that addresses the specific needs of small firms is even more important at a time of improving business confidence.”
SGEF UK managing director Giles Turner said the partnership paved the way to “bring additional equipment finance facilities to small and medium-size businesses across the UK”.
In a separate announcement made earlier this month, the EIB said it was providing IKB Leasing GmbH with €97m by purchasing asset-backed securities to help further open up the securitisation market for financing SMEs in Germany.
The EIB said improving access to finance by SMEs, which the bank said are “the engine of Europe’s economy”, is a key priority. According to the bank SMEs provide two-thirds of private sector employment and create 80% of all new jobs. SMEs are broadly defined as having fewer than 250 employees, with mid caps having between 250 and 3,000 employees.
In 2013, the EIB and its European Investment Fund subsidiary, which specialises in risk capital finance, provided a record amount of nearly €22bn for SMEs and middle capitalisation (mid cap) firms, assisting some 230,000 companies across Europe.
The former European Commission vice-president for economic and monetary affairs and the euro, Olli Rehn, said earlier this year: “To help SMEs obtain the resources they need to invest and expand, we must promote high-quality securitisation to ease their access to capital market financing... We must make better use of public funds to maximise the impact of productive investment on growth and job creation. This means creating synergies and facilitating access to funding for the renewal of key infrastructure. National and EU budgets, as well as promotional banks and export credit agencies, all have a role to play.”