European Union’s financial instruments for SMEs


The European Investment Bank (EIB) is the European Union's non-profit long-term lending institution.

It was established in 1958 under the Treaty of Rome. The tasks of the EIB is to use its financing operations to bring about "European integration and social cohesion".

It therefore acts to tap savings in support of the policies of the European Union, raising significant volumes of financing at a global level for use in the development of the European economy.

The EIB provides loans to finance activities associated with 6 priorities of the Bank:

  1. Promoting convergence, as well as economic and social cohesion in the European Union.
  2. Promoting innovation (Innovation 2010 initiative).
  3. Developing trans-European transport networks (TENs).
  4. Supporting SMEs (EIB Loan for SMEs).
  5. Protecting environment and supporting sustainable communities.
  6. Ensuring sustainable, competitive and secure energy.


EIB loans for SMEs are intended to finance business activities carried out by self-employees, small and medium-sized enterprises (SMEs) and medium capitalisation companies “MID CAPs” and can be applied to finance any investments or expenses which are essential to the overall development of a major undertaking (except for purely financial operations).

  • Tangible, i.e. the purchase of plant or real estate. In principle, the purchase of land is ruled out unless it is vital for the investment while the purchase of agricultural land is totally excluded.
  • Intangible, such as the financing of expenditure directly related to research and development, building up or taking over distribution networks, including in another EU Member State, the filing or acquisition of patents or the costs incurred in the transfer of an enterprise enabling the continuation of economic activity.
  • The permanent increase in working capital required to develop an expanding SME.

Management of the EIB loans for SMEs

EIB loans for SMEs will be provided throughout the European Union via commercial banks (acting as financial intermediaries), which will be responsible for evaluating each loan application submitted by a SME and self-employed businessmen.

For most operations, it will be entirely up to the intermediary bank to decide whether or not to grant a loan to the SME

The EIB’s participation serves to enhance the financial terms of such loans and the EIB will ensure that the SMEs concerned are clearly informed of these favourable terms.

For certain operations, the EIB can also share the risks with the banking partner or provide mezzanine finance.

The list of financial intermediaries in Spain can be found at the following address :

Amounts and depreciation periods

EIB loans for SMEs can support investment for any amount ranging from very small projects to investments costing up to EUR 25m. EIB finance can be obtained for loans of generally between 2 and 12 years (depending on the economic life of the project financed). With a contribution that can reach up to 100% of the loan granted by the financial intermediary, the maximum amount provided by the EIB may not exceed EUR 12.5m per loan.

Activity sectors

Business activities in all sectors are eligible for funding for SMEs and self-employed with the following exceptions:

  • Arms.
  • Gambling and related facilities.
  • Tobacco processing, manufacturing and distribution.
  • Activities involving animal testing.
  • Activities whose environmental impact cannot be mostly mitigated or offset.
  • Sectors that are morally or ethically controversial (such as human cloning).
  • Pure property development.


The EIB will offer the intermediary banks more sophisticated risk-sharing products designed to reach market segments that commercial banks have difficulty penetrating (i.e. SMEs for which the risk is considered too great or the security provided is judged insufficient). Three types of measure will be developed:

  • Loans where risks are shared with the banks, with the EIB guaranteeing part of the total risk taken on by the intermediary bank;
  • Loans where the EIB takes a risk on the beneficiary SME directly, in parallel with the intermediary bank; and
  • Mezzanine products for high-growth SMEs or “gazelles” through its subsidiary the European Investment Fund (EIF).

The EIB Group will provide participating loans, which are like quasi-equity and enable “gazelles” to increase their ability to obtain bank credit without necessarily having to open up their capital or provide substantial security (the participating loan being converted into shares only if the company is unable to repay the loan).


The EIB guarantee large and small projects to make them more attractive to other investors. We provide guarantees for senior and subordinated debt, either in a standard form or as a debt service guarantee similar to that offered by monoline insurers.

Beneficiaries can be large private and public projects or partner intermediaries providing SME financing.

Likewise, and through the SME Facility called Competitiveness and Innovation Framework Programme (CIP), the EIB provides its financial intermediaries (banks, leasing companies, guarantee funds, mutual guarantee institutions, promotional banks, etc.) with capped guarantees, partially covering portfolios of financing to SMEs.

Our guarantee instruments consist of two main products supporting access to finance for SMEs:

The overall objective of CIP is to improve access to finance for the start-up and growth of SMEs and to invest in innovation activities, including eco-innovation in all countries of the European Union.

Four "windows" give access to funding for:

  • Loan guarantees - guarantees for loans to SMEs with growth potential
  • Microcredit - guarantees for loans of up to €25 000 to micro-enterprises with up to nine employees, particularly entrepreneurs starting a business
  • Equity and quasi-equity guarantees - guarantees to existing equity guarantee schemes and providers of mezzanine finance to support investments in businesses with up to 249 employees
  • Securitisation - guarantees to support securitisation structures to assist financial intermediaries in mobilising debt finance for SMEs.

Information on loans to SMEs guaranteed by the EU:


Microcredit guarantees for loans of up to €25 000 to micro-enterprises with up to nine employees, particularly entrepreneurs starting a business with some difficulties to access to traditional banking services.

The European institutions have developed and managed various specific initiatives to facilitate access to microcredit:

European Progress de Microfinance Facility (EPMF)

The European Microfinance is an initiative to facilitate access to finance for micro-enterprises (including social economy), unemployment and persons liable to be or who want to start their own business.

Like EIB loans for SMEs, the PROGRESS is managed through financial intermediaries selected in each country that provide information about the requirements and procedures of applications in each country.

JEREMIE Iniciative

The JEREMIE initiative (Joint European Resources for Micro to Medium Enterprises) is an initiative of the European Commission developed together with the European Investment Fund. It promotes the use of financial engineering instruments to improve access to finance for SMEs via Structural Funds interventions.

This initiative offers EU Member States the opportunity to use part of their EU Structural Funds to finance small and medium-sized enterprises (SMEs) by means of equity, loans or guarantees, through a revolving Holding Fund.


The EIB Group (EIB and EIF) has concluded an agreement with the Kingdom of Spain and the European Commission on the implementation of the SME Initiative in Spain.

The SME Initiative brings an innovative new approach to the use of European Structural and Investment Funds, combining them with EU Horizon 2020 funds and with EIB Group resources. This combination allows the EIF to provide risk-sharing and capital relief to financial intermediaries for the ultimate benefit of SMEs.

Spain is the first country to implement this new EU initiative, contributing an amount of EUR 800 million out of its European Structural and Investment Funds (ESIF). The SME Initiative entails an innovative change in the use of ESIF, combining the latter with EU central budget (resources from the COSME and/or Horizon 2020 programmes) and EIB Group funds and guarantees.

The main aim of this initiative is to facilitate access to finance for Spanish SMEs by lowering the interest rates charged by banks on their loans. At the same time, intermediary banks will considerably reduce the risk on each SME loan, and the relevant cost of capital, by benefiting from a financial guarantee issued by the EIB Group.

The EUR 800 million contributed by the Kingdom of Spain and the regions concerned will be leveraged with commercial lending through a risk-sharing mechanism. This will result in more SMEs benefiting from European resources on advantageous terms. It is expected that more than EUR 3 billion of new SME financing will be supported under this programme. This financial instrument will act as a catalyst for private investment and foster job creation.


What is venture capital?

Venture capital provides capital to businesses which are either in the early stages of developing new products or services or in their expansion phase.

Investment by the EU is made into venture capital via venture capital funds, which are financing vehicles especially established for this purpose.  

Venture capital funds are very selective about the businesses in which they will invest. Typical areas of investment by venture capital funds are information technology and life science/biotechnology fields.

Who benefits from venture capital?

SMEs benefit from venture capital. Venture capital funds identify their own investment opportunities, depending on their investment strategy.

Who benefits from the EU’s venture capital investments?

The EU provides venture capital through the High Growth and Innovative SME Facility (GIF) which is available under CIP.

GIF covers investment into venture capital funds which have an early stage focus, including seed funds and funds dedicated to technology transfer activity, plus funds with a focus on SMEs with high growth potential in their expansion stage.

The GIF venture capital funds are managed for the European Commission by the European Investment Fund (EIF), which is an EU financial body with expertise in making venture capital investments.

A part of the budget has been set aside for proposals that promote eco-innovation.

To see a list of venture capital funds supported by the EU, please click here.

Information about raising early stage finance can be found at the European Commission’s Gate2Growth website.


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