Access to risk finance

Under the 'Industrial Leadership' pillar, this section will help companies and other types of organisation engaged in research and innovation (R&I) to gain easier access, via financial instruments, to loans, guarantees, counter-guarantees and hybrid, mezzanine and equity finance.

The priority for the next two years is to continue and build on activities that have proved their worth in supporting Research & Innovation in 2007-2013 during the last research funding programme (FP7): the Risk-Sharing Finance Facility (RSFF) and the Risk-Sharing Instrument for SMEs (RSI), together with GIF-1, the early-stage part of the High-Growth & Innovative SMEs Facility in the Competitiveness & Innovation Framework Programme (CIP).
 

Instruments

Horizon 2020's financial instrument facilities will operate in conjunction with those ofEU programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME). The coming two years will also see a significant participation by Horizon 2020 in the proposed SME Finance Initiative; the launch of a pilot facility supporting the technology transfer process; and a new focus on improving access to risk finance by larger midcap firms.

In addition, companies of all sizes, together with other types of organisation, will be able to get advice on how to make themselves more attractive to banks and potential investors. And to help prepare for new developments, studies will look into how best to encourage more business angel and crowd-funding investments in R&I; into the potential for pan-European venture capital funds-of-funds; and at the possibilities for an EU prizes scheme.

Debt and equity facilities will be run in a demand-driven manner, though the priorities of particular sectors or of other EU programmes will be targeted if top-up funding is made available, including from managing authorities wishing to invest part of their European Structural & Investment Funds (ESIF) programme contribution. The focus remains on attracting private investments into R&I. Firms and other entities located in the EU or in non-EU countries associated with Horizon 2020 are eligible as beneficiaries unless otherwise specified.
 

Financial institutions

The European Investment Bank (EIB) and the European Investment Fund (EIF) will play an important role, as entrusted entities, in implementing each financial instrument facility on behalf of and in partnership with the European Commission. For EIF, this role includes conducting calls for expressions of interest for selecting the financial intermediaries, such as banks and risk-capital funds, that will make the actual loans to or investments in SMEs and small midcaps.

While EIB will make large loans directly, it will also be able to use financial intermediaries as well, particularly when supporting medium and large midcaps. Exploratory talks with other financial institutions of comparable stature are underway, and in future one or more may join EIB and EIF in running facilities for the European Commission.

Access to Risk Finance

Under the 'Industrial Leadership' pillar, 'Access to Risk Finance' provides financial instruments that support companies and other types of organisations engaged in Research and Innovation in gaining easier access to loans, guarantees, counter-guarantees and hybrid, mezzanine and equity finance.

 

The main objective is to continue and refine facilities that have supported Research and Innovation in 2007-2013 during the last research funding programme, FP7, such as the Risk-Sharing Finance Facility (RSFF) and the Risk-Sharing Instrument for SMEs (RSI), together with GIF-1, the early-stage part of the High-Growth & Innovative SMEs Facility provided under the Competitiveness and Innovation Framework Programme (CIP).

 

Actions

The actions supporting the Access to Risk Finance include financial instruments, external expertise, studies and conferences.

Financial instrument facilities, provided by Horizon 2020, will operate in conjunction with those of the programme for the Competitiveness of Enterprises and Small and Medium – sized Enterprises, COSME. The debt and equity facilities (that will continue to be run in a demand – driven way) are the following:

 

  • Loans Service for R&I (succeeds the RSFF);
  • SMEs and Small Midcaps R&I Loans Service (succeeds the RSI);
  • Equity Facility for R&I (succeeds the GIF-1 and it is complemented by the COSME programme's Equity Facility for Growth, EFG);
  • Technology Transfer Financing Facility Pilot (new).

 

For the implementation of the facilities, the European Investment Bank (EIB) and the European Investment Fund (EIF) play an important role in partnership with the European Commission.

Budget

 

Loans Service for R&I

(mln €)

 

107,7

SMEs & Small Midcaps R&I Loans Service

87,75

Climate-Change Window

20

Joint Guarantee Instruments for R&I-intensive SMEs and Small Midcaps

60

Equity Facility for R&I

40

Piloting Co-Investments by Business Angels in Innovative ICT Firms

30

Technology Transfer Financing Facility Pilot

60

Call — Capacity-Building in Technology Transfer

2,5

Call — Boosting the Investment-Readiness of SMEs and Small Midcaps

2,5

External Expertise

18,14

Studies

Conferences

1,72

0,10

 

 

EIB

EIF

Selection

Loans Service for R&I

Instrument implemented by both EIB and EIF

Instrument delivered directly by EIB andother financial intermediaries(guaranteed against a proportion of potential losses by EIB and/or EIF)

Financial intermediaries: EIF will issue one or more calls for expression of interest;

Intermediate loans: according to the internal processes of the intermediary bank;

Direct financing operations: EIB checks the viability and DG R&I the alignment with H2020 goals of the potential financing operation

SMEs & Small Midcaps R&I Loans Service

 

Instrument implemented by EIF

Instrument delivered by other financial intermediaries (that extend the actual loans to final beneficiaries and are guaranteed against a proportion of potential losses by EIF)

Financial intermediaries: EIF will issue one or more calls for expression of interest;

Loans: according to the internal processes of the intermediary bank

Joint Guarantee Instruments for R&I-intensive SMEs and Small Midcaps

EIB and EIF resources combined with funds from COSME, H2020 and ESIF

For Horizon 2020, access to public guarantees for partner banks is conditional on passing on the benefits in the form of new loans to R&I-intensive SMEs and small midcaps

Equity Facility for R&I

 

EIF makes and manages equity investments into risk capital funds and invests in a wide range of financial intermediaries. In case of multistage funds, funding can be provided pro rata from this facility and COSME’s EFG

Risk capital funds (acting as financial intermediaries): EIF will issue one or more calls for expression of interest;

 

Investments by a selected fund in an enterprise: according to the investment strategy and procedures of the fund concerned

 

 

Technology Transfer Financing Facility Pilot

Co-financed investments (that takes form of equity and other forms of risk capital), where possible, are made alongside matching funds from EIB and/or EIF as risk-sharing partners

TT funds and vehicles (acting as financial intermediaries): one or more calls for expression of interest conducted by the entity entrusted by the Commission

Investments carried out by a TT fund or vehicle: according to the investment strategy of the fund or vehicle concerned.

 

 

 

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