Posted on Sep 05, 2019
Finnish small and medium sized business will receive a further boost in access to finance, thanks to a guarantee agreement signed between the EIF and the Finnish specialised financing company Finnvera, in Helsinki on Tuesday.
The guarantee agreement will facilitate nearly €190 million of new lending for growth seeking SMEs.
The operation is supported under the COSME Loan Guarantee Facility, backed by the European Fund for Strategic Investments (EFSI), the heart of the Juncker Plan.
Technically speaking, the EIF will ‘counter-guarantee' Finnvera, which will guarantee lending by local banks, including Aktia Bank Plc, Fennia Mutual Insurance Company, Nordea Bank Abp, OP-Services Ltd, Oma Savings Bank Plc and Savings Banks' Union Coop. In fact, the EIF will cover 50% of Finnvera's guarantee, which in turn will guarantee 80% of the lending by the participating banks. Thus, nearly EUR 190 million in new lending will be made available to Finnish SMEs under the first COSME operation of this kind in the country.
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.”
”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.” said Executive Vice President of Finnvera Juuso Heinilä.
Finnvera does not require collateral, which favours businesses who operate in the service, trade or IT sector, for example. It is estimated that at least 2,000 Finnish businesses can profit from this scheme. To apply, companies must have at least three years of activity under their belt and have a positive credit rating.
EIF Secretary General, Maria Leander, added: “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.”
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.
Finnvera is a specialised financing company owned by the State of Finland. Finnvera provides financing for the start, growth and internationalisation of enterprises and guarantees against risks arising from exports. Finnvera strengthens the operating potential and competitiveness of Finnish enterprises by offering loans, domestic guarantees, export credit guarantees and other services associated with the financing of exports.
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