Investment & Fund Management

The European Investment Fund (EIF) and the British Business Bank signed an InnovFin agreement aimed at supporting innovative small and medium-sized enterprises (SMEs) in the United Kingdom. The specific challenge faced by the British Business Bank was the need to provide guarantees on bank loans to innovative companies, which often struggle to secure funding due to perceived risks associated with their business models.

To address this issue, the EIF provided a counter-guarantee under the Horizon 2020 framework, enabling the British Business Bank to offer guarantees on loans amounting to GBP 30 million (approximately EUR 38 million) over the next two years. This tailored solution was designed to enhance access to finance for innovative SMEs, thereby fostering growth and development within this sector.

As a result of this partnership, it is anticipated that the initiative will generate a significant portfolio of bank loans, facilitating the growth of numerous innovative businesses in the UK. The EIF's Chief Executive highlighted that this agreement would provide a new funding source for innovative companies, while the British Business Bank's CEO emphasized the importance of this funding in helping smaller businesses scale up and achieve their potential. This collaboration is expected to replicate the dynamism of the UK's start-up culture in later stages of business development, ultimately contributing to job creation and economic growth in the region.