the EU bank

The EIB lends money to commercial banks at keen rates to support their lending to small businesses: it provides funds and enables favourable terms.

• To finance which enterprises ? All independent SMEs with fewer than 250 employees in the 27 EU Member States are eligible. The subsidiaries or holding companies of groups with more than 250 employees are normally not eligible.

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

  • 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.
  • 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).
  • All economic sectors are eligible except for defence, 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.

• For what amounts ? From very small projects to investments with a maximum cost of EUR 25 million. The EIB’s contribution cannot exceed EUR 12.5 million.

• What advantages does the EIB create for SMEs ? The EIB requires its partner banks to onlend to SMEs the funds that it provides at favourable rates, adding an equivalent amount from their own funds. When an EIB partner bank decides, after examining the application, to grant a loan to an SME, it is obliged to pass on to it a financial benefit compared to a standard loan and to clearly inform it by the method of its choice (letter, contract, etc.) of the fact that the favourable terms have been made possible by the EIB’s involvement. For each euro provided by the EIB the partner bank undertakes to lend at least two to SMEs, so creating a leverage effect.

• How does a small business obtain an EIB loan for SMEs ? Small businesses 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.