-European Investment Fund (EIF) and LocalTapiola Corporate Lending Fund sign guarantee agreement for up to EUR 100m of new lending to innovative Finnish SMEs and Small Mid-Caps.
-Project supported by EU budget through InnovFin SME Guarantee Facility and Investment Plan for Europe, or “Juncker Plan”.
Access to finance for Finnish small and medium sized business is set to receive a boost through a guarantee agreement signed between the EIF and LocalTapiola Corporate Lending fund, in Helsinki today. The guarantee agreement will facilitate new lending up to €100 million within the company’s corporate lending portfolio. The operation is supported under the European Commission’s “InnovFin SME Guarantee Facility”, backed by the European Fund for Strategic Investments (EFSI), heart of the Investment Plan for Europe.
The operation will enable LocalTapiola to significantly expand its niche debt financing for innovative businesses across all sectors in Finland. Eligible beneficiaries can expect favourable interest rates through reduced risk pricing on their loan. In order to qualify for this guarantee, final beneficiaries need to comply with at least one of the innovation criteria, which are available upon request with LocalTapiola. These include having registered a technology right, being a fast growing entity, high R&I investments, or simply intending to use the funds to invest in developing or implementing new or substantially improved products, processes or services.
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "With this agreement supported by the Investment Plan, Finnish small and medium-sized enterprises will get access to the financing they need to grow and innovate. They will join the 929 000 SMEs already benefitting from the Juncker Plan across Europe: we can all be proud of this success."
”We are very happy to join the InnovFin SME programme. Through InnovFin, Finnish SMEs and small mid-caps can receive supplementary financing from LocalTapiola at different development stages. The scarcity of financing and guarantees is often a stumbling block for growing and innovative companies.” said CEO of LocalTapiola Erkki Moisander.
EIF Chief Executive, Pier Luigi Gilibert, added: “Access to finance remains a crucial topic throughout Europe. Therefore, I’m glad that the EIF can support new lending to innovative firms in Finland by taking away part of the risk with this guarantee to LocalTapiola. Innovative businesses need all the support we can give them, and I’m sure this new initiative can help to provide some breathing space for these SMEs.”
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.
LocalTapiola Group in a mutual group of companies owned by its customers. It serves private customers, farmers, entrepreneurs, corporate customers and organisations. LocalTapiola's products and services cover non-life, life and pension insurance, as well as investment and saving services. We are also professionals in corporate risk management and welfare in the workplace.
The Investment Plan for Europe, known as the Juncker Plan, is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of new and existing financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. EFSI has already yielded tangible results. The projects and agreements approved for financing under EFSI are expected to mobilise almost €390 billion in investments, including €8.1 billion in Finland, and support 929 000 SMEs in the 28 Member States. More information on the results of the Investment Plan for Europe is available here.
The InnovFin SME Guarantee Facility is established under the "EU InnovFin Finance for Innovators" initiative developed under Horizon 2020, the EU Framework Programme for research and Innovation. It provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small mid-caps (up to 499 employees). The facility is managed by EIF 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 the EU and EIF against a proportion of their losses incurred on the debt financing covered under the facility.