SMEs are the backbone of the European economy. However, they have often found it difficult to gain access to much-needed cash and almost one third of them has been refused bank loans or got less funds than they asked for. The economic crisis has also made the business environment for SMEs and entrepeneurs a harder one to navigate in and euro area banks have tightened their credit standards.
The European Commission realises that information to funding is crucial for businesses to continue growing and on 25 June, launched one single online portal that offers easier access to much-needed funds. This portal is easy to use and offers up-to-date information on how SMEs and entrepreneurs can access more than €100bn of EU funding from various 2007-2013 programmes. There are now more than a 1,000 partner banks and funds available for SME financing through guarantees, loans and venture capital. These financial mechanisms are managed by financial intermediaries such as banks, venture capital funds and other financial institutions and it is the same local financial institutions that will decide on providing loans, guarantees or venture capital/equity financing. The financial institution will also have the last say when it comes to financing conditions, amounts, duration and interest rates and fees.
This new portal covers the whole range of financial supporting programmes through EU Structural Funds – the European Regional Development Fund (ERDF) and the European Social Fund (ESF), EU financial instruments for SMEs including the Competitiveness and Innovation Framework Programme (CIP), Progress Microfinance, the Risk-Sharing Instrument (FP7), EIB loans for SMEs and also member states’ national and regional operational programmes implementing cohesion policy objectives.
This website is extremely user-friendly and will help entrepreneurs and small businesses in finding financing that is tailor-made to their own precise needs. The portal is available in all EU languages and open to all EU and candidate countries. Some of the funding opportunities found in this portal are:
The Competitiveness and Innovation Framework Programme provides guarantees in order to increase the supply of debt finance to SMEs and increases the supply of equity for SMEs.
Structural Funds enhance the supply of loans, guarantees, venture capital/equity or grants for SMEs. Member states can use part of the allocation of the Operational Programme(s) co-financed with the ERDF and the ESF for this purpose.
Progress Microfinance increases the availability of microloans (up to €25,000), including for disadvantaged and under-represented groups, for starting or developing a micro enterprise (with less than 10 employees).
7th Framework Programme for Research and Technological Development The Risk Sharing Finance Facility improves access to debt financing for private and public companies undertaking R&D and innovation projects. It targets primarily innovative medium-sized and larger companies. It includes also a Risk Sharing Instrument to increase the supply of debt financing to SMEs and small mid-caps (companies with less than 500 employees) that have innovation potential or a focus on R&D and innovation.
European Investment Bank (EIB) Group is the long-term financing institution of the EU. It improves access to finance for SMEs as part of its support for growth and jobs in Europe.
European Investment Fund is part of the EIB Group and its central mission is to support micro, small and medium-sized businesses. The European Investment Fund manages a wide range of EU financial instruments, which are delivered through financial intermediaries such as banks, equity funds and other financial institutions.
Maltese SMEs and entrepreneurs can also access funding through several financial intermediaries such as:
The Risk Sharing Finance Facility of the EIB targets primarily innovative medium-sized companies and can support research, development and innovation.
EU grants, funds & programmes provide direct access to all open calls for proposals published by the Commission (among them, many SME-specific programmes).
EU Structural Funds issued by the Managing Authority or intermediate bodies such as Malta Enterprise or Employment & Training Corporation (ETC) that implement aid schemes.
Business Promotion Act which offers indirect support through loan guarantees and soft loans.
Malta Enterprise offers direct support through an array of incentives offered to companies that invest. These incentives cover investment aid, enterprise support and SME development.
European vice-president and commissioner for Industry and Entrepreneurship, Antonio Tajani, and commissioner for Regional Policy, Johannes Hahn, both reiterated that this portal for EU financing would be aiding SMEs find easier and faster funding. Both commissioners also stated that the Commission was aware that it needed to simplify and lessen any impediments that businesses face; thus, improving access to SME funding was crucial to economic recovery. Commissioner Tajani noted that the Commission wants to encourage member states and regions to use EU financial instruments since they can enhance the impact of cohesion policy.
For more information contact Meusac on www.meusac.gov.mt
Simone Aquilina is an executive on EU Policy and Legislation within Meusac