Financial instruments: calls and programs of the European Union

A key factor for the small and medium-sized enterprises in Europe is to gain access to the financing made available by the European institutions. The European SMEs can be financed in two ways with European funds.

1.- Direct Financing

Direct financing is carried out through grants for specific objects of the European policies. It tends to have a thematic nature, establishing specific objectives on the different issues (environment, investigation, education, etc.) that are designed and implemented by the European Commission directorates-general.

The European Union Programmes are the instruments used to finance the EU policies. It constitutes a set of actions undertaken by the European institutions to carry out specific projects or activities that represent an added value for the application of the Community policies.

For the period 2014-2020, the development of the direct funding for the SMEs have been considered, through programmes such as:

The basic principle of the financing of these programmes is the co-financing, that is, the support that has been given by the European Union will be granted that cover a part of the projects submitted by the SMEs or other organisations.

The grants are made through the publication of the call for proposals, which means that the eligible projects have to be submitted by a certain deadline, comply with clearly defined themes. Depending on the programmes, the call for applications is open to a wide range of participants which may include from public institutions of different territorial area to ONGs, enterprises, research and technological centers, etc. The EUROSMES network offers the opportunity of visualise the call for proposals emitted by the European Union and aimed at enterprises and employers’ organisations, with a special interest in those that affect the SMEs.

2.- Indirect Financing

The indirect financing is carried out through financial intermediaries, such as banks, credit institutions and investment funds. Its objective is to increase the volume of the credit for SMEs, and encourage these intermediaries to improve their lending capacity to SMEs.

The European Union supports the entrepreneurs and enterprises through financial instruments, managed by financial intermediaries that give loans, guarantees, venture capital financing and other forms of equity financing. The decision to grant a loan, a guarantee or an equity financing or equity capital is taken by a local financing institution and the exact financing conditions (amount, duration, the interest rate and charges) depend on this financing institution.

Public procurement

On the other hand, the European Commission resorts to the public procurement to buy goods and services such as studies, technical assistance, consultancy, conference and publicity services, books and computer material, etc. The suppliers are selected through tenders published by departments, offices and agencies of Commissions in all Europe.

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