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Record agreement: The EU provides guarantee of DKK 1.6 billion for loans to Danish SMEs

The Danish Growth Fund has signed the largest agreement of its kind with the European Investment Fund. The agreement provides the Danish Growth Fund with a guarantee of DKK 1.6 billion for loans to SMEs.

Publiceret: 21.12.2017
Af Felix Bekkersgaard Stark mail

The Danish Growth Fund and the European Investment Fund, EIF, have signed a new guarantee agreement for DKK 1.6 billion, which will allow the Danish Growth Fund to further increase its financing for SMEs. Minister for Industry, Business and Financial Affairs Brian Mikkelsen applauds the new agreement, which is the biggest of its kind in the Danish Growth Fund’s history.

“We are continuously focused on ensuring the best possible conditions for Danish SMEs so that they can invest in the future and develop as companies. Access to capital is decisive, and it is very positive that, with this agreement, we have drawn significant resources from the EIF to Denmark so that our SMEs can receive cofinancing for their growth plans,” says Brian Mikkelsen in a press release.

The guarantee from the EIF covers up to 50 per cent of the Danish Growth Fund’s losses on the products Growth Loans, Growth Loans for Entrepreneurs and Responsible Loans.

“In terms of amount, this is the biggest agreement we have signed to date and it brings our total agreement sum with EIF to DKK 4.4 billion. This creates new opportunities, both for financing more companies and for taking greater risks. We can thereby extend our reach even further among SMEs,” says Director of the Danish Growth Fund Christian Motzfeldt in the press release.

DI expects more resources for SMEs

The Confederation of Danish Industry welcomes the news.

“There is a great need to secure resources to finance growth and development of SMEs. The guarantee helps make it possible for the Danish Growth Fund to enter a market where it can be difficult to obtain private risk capital and where the fund can play a significant role,” says Director of SME and Entrepreneurship Dorte Gram Nybroe, the Confederation of Danish Industry (DI).

She notes that there is a large backlog in the companies’ investments, which weakens the competitiveness of Danish companies.

“Given the economic development we have had, Danish companies ought to have invested DKK 50 billion more in equipment than is currently the case. This is because smaller companies have difficulty finding risk capital for investments, and that is something this agreement can help rectify,” says Dorte Gram Nybroe.

About the European Investment Fund
The central aim of the European Investment Fund (EIF) is to support Europe’s SMEs by improving access to financing. EIF designs and develops financial instruments within venture and growth capital, guarantees and microfinancing. The EIF thereby fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.
Source: Ministry of Industry, Business and Financial Affairs

About InnovFin’s SME guarantee
The aim of the InnovFin SME Guarantee Facility is to give banks and other financial institutions further incentive to provide financing to SMEs and Small Mid-caps (up to 499 employees) in need of investments or working capital to finance e.g. research, development and other innovative activities. The EIF selects partners among financial institutions in Europe who receive guarantees to cover a portion of any losses incurred.

Read more about the InnovFin programme
Source: Ministry of Industry, Business and Financial Affairs

Given the economic development we have had, Danish companies ought to have invested DKK 50 billion more in equipment than is currently the case.

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PUBLISHED: 12/21/2017 LAST MODIFIED: 12/21/2017