COSME Financial Instruments
2014-2020
Madrid, 6 June 2014
Vilmos Budavari
European Commission
DG Enterprise and Industry, Unit D.3 "SME Access to Finance"
Programme for the Competitiveness of
Enterprises and SMEs (COSME)
 The four objectives and their repsective budget allocation:
 To enhance access to finance;
Min 60%
 To improve access to markets;
~11,5%
 To improve framework conditions;
~21,5%
 To promote entrepreneurship.
~2,5%
 COSME budget: €2,3 billion for the period 2014 – 2020
(current prices)
Enhancing access to finance
• Two financial instruments under COSME:
• Loan Guarantee Facility to provide guarantees for loans to SMEs;
• Equity Facility for Growth to invest in SMEs in their expansion phase.
• About EUR 1.4 billion for the period 2014-2020.
• Commission delegates implementation to so-called
entrusted entities (e.g. EIF).
• Demand-driven; applications to entrusted entity.
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Loan Guarantee Facility (LGF)
 Strict focus on additionality => guarantees focus on
transactions with a higher risk profile.
 Wide range of interventions => Working capital, investment
loans, subordinated loans, bank guarantees, leasing.
 Duration: min. 12 months (transaction) – max. 10 years
(guarantee).
 SME financing up to EUR 150,000 for any type of SME.
 > EUR 150 000 financing possible if the SME does not fulfil
criteria to be eligible under the Risk Sharing Instrument of
Horizon 2020 (RSI) – verification through checklist.
 Securitisation of SME loan portfolios.
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LGF Securitisation Option
 The COSME Securitisation Window will enable the
securitisation of SME debt finance portfolios to mobilise
additional debt financing for SMEs.
 Support for the transactions will be conditional upon an
undertaking by the financial intermediary to use a
significant part of the resulting liquidity or mobilised capital
for new SME lending in a reasonable period of time.
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Equity Facility for Growth
 Supports investments in risk capital funds which in turn
invest predominantly into SMEs at the growth and
expansion stage.
 Funds co-operating with business angels are eligible as long
as certain criteria are met.
 Long-term investments (5 to 15 year positions).
 Funds must contribute to the creation of a pan-European VC
market (e.g. make cross-border investments).
 Possibility of joint investments with the early-stage equity
facility of Horizon 2020 into multi-stage funds.
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Implementation of COSME Financial Instruments
EU funding
Entrusted Entity (e.g. European Investment Fund )
Venture capital
investments
Guarantee funds/Loans
Other investors
EIF selects its financial
intermediaries based on
competence. The selection
criteria and the list of
intermediaries will be public, and
intermediaries should apply
directly to the EIF.
Venture
capital
fund
Venture capital
investment
in SMEs
Guarantor
Bank
Lending
to SMEs
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Horizon 2020 & COSME Financial Instruments
Equity instruments
• Equity Facility for R&I (H2020);
• Equity Facility for Growth of SMEs (COSME).
Debt instruments
• SMEs & Small Midcaps Guarantee Facility for R&I (H2020);
• Loan Guarantee Facility for SMEs (COSME).
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Financial intermediaries for
CIP SME Guarantee Instrument
http://europa.eu/youreurope/business/funding-grants/access-to-finance/
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Thank you for your attention!
COSME: http://ec.europa.eu/cip/cosme