Finnish SMEs to receive EUR 100 million from EIF

Access to finance for Finnish small and medium sized business is set to receive a boost through a guarantee agreement signed between the European Investment Fund (EIF) and LocalTapiola Corporate Lending fund.

The agreement was signed in Helsinki on Friday, said EIF in a press release.

The guarantee agreement will facilitate new lending up to EUR 100 million within the company’s corporate lending portfolio. The operation is supported under the European Commission’s “InnovFin SME Guarantee Facility”, backed by the European Fund for Strategic Investments (EFSI), heart of the Investment Plan for Europe.

The operation will enable LocalTapiola to significantly expand its niche debt financing for innovative businesses across all sectors in Finland. Eligible beneficiaries can expect favourable interest rates through reduced risk pricing on their loan. In order to qualify for this guarantee, final beneficiaries need to comply with at least one of the innovation criteria, which are available upon request with LocalTapiola. These include having registered a technology right, being a fast growing entity, high R&I investments, or simply intending to use the funds to invest in developing or implementing new or substantially improved products, processes or services.

"We are very happy to join the InnovFin SME programme. Through InnovFin, Finnish SMEs and small mid-caps can receive supplementary financing from LocalTapiola at different development stages. The scarcity of financing and guarantees is often a stumbling block for growing and innovative companies.” said CEO of LocalTapiola Erkki Moisander.

European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "With this agreement supported by the Investment Plan, Finnish small and medium-sized enterprises will get access to the financing they need to grow and innovate. They will join the 929 000 SMEs already benefitting from the Juncker Plan across Europe: we can all be proud of this success."

EIF Chief Executive, Pier Luigi Gilibert, added: “Access to finance remains a crucial topic throughout Europe. Therefore, I’m glad that the EIF can support new lending to innovative firms in Finland by taking away part of the risk with this guarantee to LocalTapiola. Innovative businesses need all the support we can give them, and I’m sure this new initiative can help to provide some breathing space for these SMEs.”