SMEs can have access to loans most often through their local financial instruments. Most times, it is standard procedure for the loans to be backed by the EIB but sometimes they can be also backed by other active local lending opportunities.

EIB provides guarantee to the lending financial instrument, usually for around half of the lending amount, therefore the bank to reduce its risk and provide the SME with easier access to loans and with greater terms. In other words, when the risk is lower, the bank can lower the interest of the loan.

The loans to SMEs can start from as low as 10k € and can go up to around 1,5M €.

In 2024, the range of interest can be from 7-9%, but that can vary wildly in today’s volatile financial situation.

Who can benefit from an EIB Loan

The EIB’s clients are public and private sector entities. Any project promoted must be in line with the eligibility criteria and be financially and economically sound.

Eligibility criteria:

The EIB finances projects in most sectors. Eligible projects contribute to EU economic policy objectives:

• Promotion of economic and social cohesion (development of poorer regions) in the EU
• Improvement of EU transport and telecommunications infrastructure (rail, air, road connections and bridges)
• Secure energy supplies - production, transfer and distribution, more efficient energy use, alternative energy supplies
• Development of a competitive, innovative and knowledge-based European economy (i2i)
• Investment in human capital (schools, universities, laboratories, research centres, hospitals etc.)
• Natural and urban environment schemes (water, waste, cleaner air, urban transport etc.)
• Development of small and medium sized enterprises
• Industrial projects improving EU competitiveness
• Projects that support EU's external co-operation and development policies

Note: The EIB does not provide grants or venture capital. European Union grants are managed by the European Commission. The European Investment Fund (EIF) provides venture capital.

Loans to SMEs

For projects where the total cost is under EUR 25 million, the EIB provides intermediated loans (credit lines) to local, regional and national banks. Therefore, most SMEs and Mid-Caps are financed via intermediated loans. The EIB makes a loan to local banks and intermediaries, which on-lend to final beneficiaries. Promoters interested in EIB financing for projects under EUR 25 million should contact the banks and other intermediaries involved directly with a detailed description of their capital investment together with the prospective financing arrangements.

Who are the target beneficiaries?

The SME Access to Finance Initiative aims to enhance access to finance for businesses and individuals:

• SMEs: businesses with less than 250 full-time employees
• COVID-19 affected SMEs
• SMEs in specific geographical areas
• Start-ups: businesses with less than 50 full-time employees and operating for less than 36 months
• SMEs at least 50% owned by women or young people aged less than 35 years
• Individual female entrepreneurs
• Individual young entrepreneurs aged less than 35 years

What is eligible

The intermediated loans are to finance small investments by SMEs into tangible and intangible assets, including purchase or renovation of assets, long-term working capital, etc.

Financial Details

The EIB provides loans running from approximately four to twenty years, depending on the economic life of the assets to be financed. The EIB does not publish information on the financing terms and conditions of its loans, such as maturity, interest rates and grace period. This information typically forms part of the EIB’s confidential relationship with its business partners.

The EIB can only make a specific quote for lending following a thorough appraisal of the project. Loan rates will also vary according to specific aspects such as currencies borrowed, amount, duration and timing of disbursement.

As well as fixed interest rates, the EIB can offer revisable and convertible rates, allowing for a change of interest rate formula during the life of the loan at predetermined dates or during predefined periods.

Financing may be combined with EU grants depending on the scope and definition of a particular project. More information on EU grants can be found in the dedicated section of the European Commission website.

Project approval

A project appraisal is carried out by the Bank’s teams of engineers, economists and financial analysts, in close cooperation with the promoter. Criteria are typically tailored to each specific project. A report then goes from the Management Committee to the Board of Directors, who meet 10 times per year, for a final decision. Once they approve, the loan can be drawn down in one or more instalments according to borrower requirements.

An EIB appraisal procedure can take anywhere between six weeks and 18 months depending on the project scope, the degree of complication of an operation, and the efficiency of the appraisal process on the part of both the EIB itself and the project promoter.