ACCESS TO FINANCE

Improving access to finance for European SMEs is crucial for entrepreneurship, competitiveness, innovation and growth. The European Commission focuses on reducing or removing market gaps, complementing Member States' measures and working with the market, to stimulate the provision of debt and equity finance to SMEs.

Getting a company off the ground or expanding it requires money, and raising the right kind of finance can be a major difficulty for Europe’s small and medium-sized enterprises (SMEs). On the one hand, risk-aversion makes investors and banks shy away from financing start-up SMEs. On the other, the world of finance is often less accessible for SMEs than it could be and European entrepreneurs sometimes have limited understanding of investors’ or banks’ concerns, making it even harder for them to find the financial backing they need.

The EU contribution to SME financing

The 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

The CIP policies and financial instruments
(click on the red and blue items for further information)

We do not provide direct financial support

If you look for Community funding, the SME portal, the new online tool, or the Enterprise Europe Network provide information on both national and EU financial support. The financial instruments mentioned on this site are managed by the European Investment Fund and implemented via financial intermediaries or specialised funds, to which those interested should refer directly.