The European Investment Fund (EIF) has signed a guarantee agreement to provide lending support to small and medium sized enterprises (SMEs) in Finland.
The agreement between the EIF and specialised financing firm Finnvera will facilitate lending worth just under €190m by providing guarantees for finance offered by local banks; and is supported by the European Fund for Strategic Investments (EFSI). Lending services guaranteed under the scheme, which is expected to extend finance to around 2,000 businesses, will be offered to SMEs in Finland seeking growth capability.
Elżbieta Bieńkowska, European Commissioner for Internal Market, Industry, Entrepreneurship and SMEs, said: “Small European businesses that want to grow faster are still facing substantial challenges in obtaining financing. This is why support from EU programmes such as COSME and the Juncker Plan are crucial. I commend Finnvera for taking the initiative in joining forces with the European Investment Fund to help close the financing gap for SMEs in Finland.”
Finnvera, which does not demand collateral in its finance practices, will guarantee banks’ lending by up to 80%; while the EIF will cover Finnvera’s guarantee by up to 50%. Participating banks include Aktia Bank Plc, Nordea Bank Abp, OP-Services Ltd and Savings Banks’ Union Co-op.
Finnvera Executive Vice President Juuso Heinilä said: “This guarantee agreement ensures that growth-seeking Finnish SMEs have better than before access to financing they need. At the same time it enables Finnish banks to grant loans to a larger number of growth companies. By virtue of EIF’s counter-guarantee Finnvera will not require any collateral from companies applying for our guarantee under this scheme. The guarantee is also very easy to apply for. Growth usually requires financing, and one of our goals is to enable that growth in Finnish SMEs. The benefits of this counter-guarantee will be directed straight to growth-seeking companies.”
Secretary General of the EIF Maria Leander said: “Finland is known for its many smaller companies that are leading on the world stage. However, without the right financing even the best business idea might not make it. I’m glad that the EIF, together with Finnvera, can support Finnish SMEs that want to grow, by making available nearly 190 million euros through local banks, thus supporting employment and growth.”