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Internal Market, Industry, Entrepreneurship and SMEs

Access to finance

Europe’s 25 million small and medium-sized enterprises (SMEs) are our focus. They represent over 99% of businesses in the EU. They employ two out of every three employees, create 85% of all new jobs and generate about three-fifth of the EU value-added. Tailor-made support to help them grow and innovate is essential. At all stages of development, small businesses struggle more than large enterprises to get finance. To stay competitive, both start-ups and scale-ups rely on external finance for innovation, digitalisation, internationalisation and upskilling.

Financing your business through repayable forms of finance

EU financing programmes, which support repayable forms of finance such as loans, guarantees and equity investments (also called financial instruments), are not provided as direct funding by the European Commission. We especially channel support for small businesses through local, regional, or national authorities, or financial intermediaries such as banks and venture capital funds.

See the introduction video on the EU access to finance.
Visit the EU access to finance portal to find intermediaries.

EU financial instruments are risk-sharing schemes. Examples are guarantees to financial intermediaries who provide lending, lease finance, or co-investments with venture capital funds, backed by EU funds. Reputable financial intermediaries such as banks, lessors, mutual guarantee societies, microfinance providers and venture capital funds provide the final support. They are closer to the final beneficiaries and qualified to assess their needs and risks. Furthermore, they can work in the local language of the small businesses and are familiar with the local legal requirements. Decisions to provide loans, guarantees, or venture capital are made by the local financial institutions. While the European Commission defines the eligibility criteria, those financial institutions decide on the exact financing conditions (such as the amount, duration, interest rate, and fees).

EU financial instruments are market-driven, there are no country allocations and whether funding is available depends on local financial institutions' interest in participating in the scheme. The financial intermediaries create individual products suited to the needs of businesses in their market within the framework of the eligibility criteria established by the European Commission.

Direct aid is only available for projects that specifically contribute to the implementation of an EU programme or policy, see calls for proposal

Coronavirus response in relation to financing for businesses

We have been mobilising financial support for SMEs through the COSME programme. In particular, we have boosted the existing 'Loan Guarantee Facility' (LGF) under the programme with additional resources from the European Fund for Strategic Investments to enable banks to offer bridge financing for SMEs. This includes long-term working capital loans (of 12 months or more), as well as credit holidays allowing for delayed repayments of existing loans.

To participate, financial intermediaries had to apply via the European Investment Fund by the end of 2020. Financial intermediaries participating in this programme can provide new financing to SMEs under favourable conditions and simplified eligibility criteria until 30 June 2022. SMEs in search of finance have the opportunity to apply for the working capital facilities directly from the participating financial intermediaries. More information and the names of the institutions are available on the access to finance website.

By 31 December 2021, more than 100,000 SMEs already received €9 billion of financing under the COSME LGF-Covid 19 measures.

Additionally, EU countries, national promotional and commercial banks have been putting measures in place for adversely affected SMEs. They focus on facilitating financing, in particular working capital, and flexibility on repayments of existing loans. For more information, see the European Guarantee Fund as an example.

Lastly, The European Scale-up Action for Risk capital (ESCALAR) programme supports venture capital and growth financing to help promising companies scale up.

Policy areas

Forum of national financing experts of the SME Envoys Network

The SME envoys network's forum of national financing experts regularly analyses and discusses issues and solutions around improving access to finance for small businesses.

In 2021 we conducted a survey with the SME envoys network to help address the solvency risk affecting SMEs during and after the COVID-19 pandemic. As announced in the Industrial Strategy, we held a roundtable with national financial experts nominated by the SME envoys network at the end of September 2021. It addressed the exchange of good practices on national measures to aid recapitalisation, debt conversion, and SME balance sheet strengthening. 

Data and surveys - SAFE

The joint European Commission/European Central Bank survey on the access to finance of enterprises (SAFE) monitors developments in access to finance for small businesses.
Data and surveys - SAFE

Main EU initiatives