The European Investment Bank (EIB) and BNP Paribas Fortis have signed a new partnership agreement concerning a EUR 250m loan for small and medium-sized enterprises (SMEs) and midcaps.
In line with previous operations, the branches of the BNP Paribas Fortis network will be responsible for on-lending the EIB funds in the form of loans and/or leasing facilities to the self-employed, professionals, SMEs and midcaps, thereby providing them with access to a low-cost source of finance for their capital projects.
With its "Loans for SMEs and midcaps" programme the EIB, the European Union's financing institution, intends to support the economic development and competitiveness of small businesses. To that end it works in collaboration with commercial banks, which act as intermediaries and use their branch networks and knowledge of SMEs and midcaps.
This type of operation takes the form of a credit line that BNP Paribas Fortis will use for the benefit of businesses with fewer than 250 employees across a wide range of economic sectors eligible for EIB financing. The new agreement signed with BNP Paribas Fortis extends this facility to medium-sized companies (midcaps) with 250 to 3 000 employees.
The projects financed must be carried out within the European Union and may not exceed EUR 25m per project. Refinancing operations and purely financial or real estate transactions are excluded. The new "EIB loans for SMEs and midcaps" formula is flexible and transparent. It will ensure that the beneficiary companies benefit from the advantages of EIB funding, mainly in the form of lower interest rates, and they will be explicitly informed of this.
The new EIB–BNP Paribas Fortis loan will take over from the earlier facilities, which totalled EUR 450m and were signed in 2009, 2010 and 2011, but have now been fully used.
Max Jadot, CEO of BNP Paribas Fortis, commented: "It is essential for businesses to have access to funds that will enable them to finance their investments and seize new opportunities. We are glad that the European Investment Bank has enabled us once again to support our SME customers. The loans granted since 2009 have been very successful with entrepreneurs in Belgium. A total of more than 1 700 businesses in all sectors – services and industry – were able to benefit from them, on very favourable terms. These loans are fully consistent with our remit as a banker, which is to finance the Belgian economy by supporting its businesses and its public sector."
EIB Vice-President Pim van Ballekom continued: “We are pleased to be launching this new operation with BNP Paribas Fortis. We will thus be able to continue to provide Belgian entrepreneurs with the favourable EIB terms to finance their projects. Since the start of the crisis we have stood shoulder to shoulder with SMEs and will continue to support them, as their development is crucial for a return to growth. They will spearhead the creation of jobs. Supporting them continues to be a priority for the bank of the European Union."
Since the beginning of 2014 loans disbursed by the EIB for SMEs and midcaps in the EU and its partner countries amount to EUR 12.1bn. Over the first eight months of the year new signatures – in 20 countries and with 88 banking partners – totalled EUR 12.9bn. This support is considerable and ensures that entrepreneurs will have funds available and that finance will continue to be provided for their projects.