Israeli SMEs to benefit from around €93 million in EU-guaranteed loans
Small and medium-sized enterprises (SMEs) in Israel will get easier access to risk capital thanks to a new EU-backed loan guarantee facility under the Horizon 2020 programme. A deal signed today by European Investment Fund (EIF) with Bank Leumi will allow the bank to enter into new loan agreements with SMEs as well as Small Mid-caps for a total of USD 100 million (about €93 million) over the next two years.
Carlos Moedas, European Commissioner for Research, Science and Innovation, said: "The InnovFin SME Guarantee deal signed today will open up new ways of funding for innovative companies in Israel. It is yet another example of how open innovation and being open to the world under Horizon 2020 benefits both the EU and its partners."
The loans to finance innovation activities will be guaranteed up to 50% by the European Investment Fund and the European Union (EU) under InnovFin SME Guarantee, which targets early and development stage companies. It is part of the new generation of financial instruments supported under Horizon 2020, the EU's Framework Programme for Research and Innovation (IP/14/670), and is open to EU Member States and countries associated to the programme.
Israel has been associated to the EU framework programmes for research for the last 20 years. The announcement of the deal comes a month after Commissioner Moedas paid a visit to the region.
InnovFin SME Guarantee Facility provides guarantees and counter-guarantees on debt financing of between €25,000 and €7.5 million in order to improve access to loan finance for innovative small and medium-sized enterprises and small midcaps (up to 499 employees). The facility is managed by the EIF, and is rolled out through financial intermediaries – banks and other financial institutions – in EU Member States and Associated Countries. Under this facility, financial intermediaries are guaranteed by the EIF against a proportion of their losses incurred on the debt financing covered under the facility.
InnovFin SME Guarantee is part of "InnovFin – EU Finance for Innovators", the new generation of EU financial instruments and advisory services that was developed under Horizon 2020 to help innovative firms access finance more easily. It will help inject up to €48 billion in investments in Research and Innovation across Europe.
About Horizon 2020
On 1 January 2014, the European Union launched a new research and innovation funding programme called Horizon 2020. Over the seven years, almost €80 billion will be invested in research and innovation projects to support Europe’s economic competitiveness and extend the frontiers of human knowledge. The EU research budget is focused mainly on improving everyday life in areas like health, the environment, transport, food and energy. Research partnerships with the pharmaceutical, aerospace, car and electronics industries also encourage private-sector investment in support of future growth and high-skilled job creation.