EIB Medium Sized Corporate Credits

The EIB lends money to commercial banks at keen rates to support their lending to medium-sized corporates (MidCaps): it provides funds and enables favorable terms.

• To finance which enterprises ? All independent MidCaps with fewer than 3 000 employees in the 27 EU Member States are eligible.

• To finance what ? All expenditure necessary for a business to develop, such as:

1. Tangible investments: purchases of plant and equipment. Land purchases are ruled out unless they are essential to the project. The purchase of farm land is totally excluded.
2. Intangible investments: particularly the expenditure involved in R&D, building up or taking over distribution networks in domestic or other markets within the EU, taking out or buying patents, buying out a company in order to safeguard economic activity (for a buy-out cost of nor more than EUR 1 million).
3. Working capital: Medium and long-term working capital requirements can be financed through the EIB Loan. However, this type of financing granted by the bank must meet an ongoing need and cover at least a two- year period.
4. All economic sectors are eligible except for a limited number of exclusions including defense, gambling, activities involving live animals for experimental and scientific purposes insofar as not compliant with the “Council of Europe’s Convention for the Protection of Vertebrate Animals used for Experimental and other Scientific Purposes”. Will also be excluded activities whose environmental impact cannot be mitigated or offset, ethically or morally controversial sectors such as human cloning, pure property speculation and consumer credit. The list is updated from time to time.

• For what amounts ? For investments with a maximum project cost of EUR 25 million, the EIB’s contribution can cover up to 100% of the loan granted by the intermediary bank but cannot exceed EUR 12.5 million;  for investments with a maximum project cost of EUR 50 million, the EIB’s contribution can cover up to 50% of the project cost.

• What advantages does the EIB create for MidCaps ? The EIB requires its partner banks to onlend to MidCaps the funds that it provides at favorable rates compared to a standard loan. When an EIB partner bank decides to grant a loan, it is obliged to inform the MidCap of the fact that the favorable terms have been made possible by the EIB’s involvement.

• How does a MidCap obtains an EIB loan ? They have to address their loan application to the commercial banks that have received an EIB credit line. It should be noted that it is entirely up to the partner bank that examines the application and bears the credit risk to decide whether or not to grant the loan.