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European guarantee for Invest-NL to expand financing options to innovative SMEs

Invest-NL and European Investment Fund (EIF) sign an agreement under “InnovFin SME Guarantee Facility” to unlock up to €66 million in SME-lending.

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  • The EIF’s guarantee for SME support was made available by the European Commission under the European Fund for Strategic Investments (EFSI).
  • Invest-NL shares the EU’s aim of supporting innovative SMEs, and expects to sign up to 10 new operations under this agreement.

Dutch National promotional institution Invest-NL has signed a new guarantee agreement with the European Investment Fund to cover a lending portfolio to innovative Dutch SMEs. This new guarantee enables Invest-NL to further enlarge its financing activities for innovative SMEs, a market segment that appears to be hard-pressed by the ongoing Covid-19 pandemic. As a result of this agreement, Invest-NL will be able to provide up to €66 million in loans to innovative SMEs.

The loan guarantees are provided by the InnovFin SME Guarantee Facility under the EU Framework Programme for Research and Innovation Horizon 2020, launched by the European Commission to improve access to finance for innovative SMEs and midcaps. The agreement falls under InnovFin SMEG COVID-19 Support Measures enabled by a top up from the European Fund for Strategic Investments (EFSI).

The agreement means that SMEs can get better financing terms from Invest-NL, through lower interest rates and reduced risk requirements, because of the EIF and the InnovFin-programme taking over part of the risk. It is expected that Invest-NL will be able to sign up to 10 new operations under this agreement.

Executive Vice-President for an Economy that Works for People, Valdis Dombrovskis, said: “SMEs that are hard-hit by the current crisis should have continuous access to financing to help them get back on their feet and kick-start the economic recovery. Thanks to the guarantee of EIF and the Investment Plan for Europe, Invest-NL will unlock additional loans on favourable terms to support Dutch SMEs in these difficult times.”

Ruud Zandvliet, senior investment manager at Invest-NL, said: “Scaling up innovative Dutch SMEs is of vital interest for making the Netherlands more sustainable and innovative. The InnovFin SME Guarantee is a welcome enlargement of our product portfolio for these innovative companies. With the new guarantee backed by the EIF we can now offer them better financing conditions and engage in investments that would otherwise be off limit due to (too) high risk requirements. Furthermore, I am happy to see where the cooperation between the EIF and Invest-NL is taking us and I look forward to explore new opportunities.”

“SMEs really are the backbone of the Dutch economy,” added Alain Godard, Chief Executive of the EIF. “And this unprecedented crisis highlights the need for enhanced access to finance with favourable terms for this segment. The EIF is working around the clock to fulfil its mission of supporting Europe’s SMEs by deploying a broad range of different instruments, from fund investments like the recent Dutch Future Fund, to guarantees like this one.”

Background information

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment.

Invest-NL is the Netherland’s main National Promotional Institution (NPI). As an impact investor, Invest-NL is committed to businesses and projects that will make The Netherlands more sustainable and innovative, with a focus on the energy transition and innovative, fast-growing companies, or scale-ups. Invest-NL supports innovative entrepreneurs through financing and advice according to one simple principle: impact is our goal, return is our means. Invest-NL is a private organisation funded by the Dutch government with a capital base of €1.7 billion. For more information, visit www.invest-nl.nl

InnovFin SME Guarantee provides guarantees and counter-guarantees on debt financing of between EUR 25,000 and EUR 7.5 million in order to improve access to financing for innovative SMEs and mid-caps. The facility is managed by EIF under Horizon 2020, the EU Framework Programme for Research and Innovation, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by EIF against a proportion of their losses incurred on the debt financing covered under the facility. As part of the policy response to address the economic disruption caused by COVID-19, thanks to a top up from the European Fund for Strategic Investments (EFSI), the facility was amended to facilitate the availability of finance to businesses, in particular liquidity facilities and working capital finance (“SMEG COVID-19 Support”).  

The European Fund for Strategic Investments (EFSI) is the main pillar of the Investment Plan for Europe. It provides first loss guarantees enabling the EIB Group to invest in riskier projects. The projects and agreements approved for financing under EFSI have so far mobilised €535.4 billion in investment, benefitting over 1.4 million SMEs.

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