InnovFin – EU Finance for Innovators

Business investment in innovation is lower in the EU than in other parts of the world. Besides finding customers and skilled staff, access to finance is a major concern for many companies. It is even more difficult to secure private investment in research and innovation, which is by nature riskier and harder to appraise.

In order to help organizations finance their research and innovation activities, the European Union and the European Investment Bank (EIB) support a range of financial instruments and advisory services. As part of the “Industrial Leadership” pillar of Horizon 2020, “InnovFin – EU Finance for Innovators” comprises five main products, covering both direct loans from the EIB Group, and guarantees to financial intermediaries. These financial intermediaries, mostly banks, are selected following a call for expression of interest.

Building on past efforts

InnovFin is the successor of the Risk-Sharing Finance Facility implemented under FP7. From 2007 to 2013, RSFF provided over €11 billion of finance to 114 R&I projects worth over €30 billion.

Under the 2014-2020 programming period, the combined financial support from the EU and the EIB Group will be more than twice as high. InnovFin will provide more than €24 billion of financing, with the Horizon 2020 budget contributing €2,7 billion to back InnovFin guarantees and loans.

Principles

There are no prior allocations between sectors, countries or regions. Loans provided by the EIB Group can cover the range from €25 000 to €300m. The EIB’s support will cover 35% to 50% of the project’s cost, the remainder being provided by other financiers or the organization’s own funds.

Financing products for research and innovation

InnovFin financing tools cover a wide range of loans and guarantees which can be tailored to innovators’ needs. Financing is either provided directly or via a financial intermediary, most usually a bank.

Besides the financing instruments, the InnovFin Advisory Services part offers clients advise on how to structure their R&I projects to improve their access to finance. The target groups are promoters of large R&I projects that meet the Horizon 2020 Societal Challenges.

While five instruments are already in place since June 2014, the SME Venture Capital, a range of equity instruments managed by the EIF, will be introduced in a near future.

Speedy procedures for viable projects

The EIB assesses the project’s eligibility, technological and economic viability, and other criteria. It may take between 3 and 6 months to sign a financing contract. For the InnovFin SME Guarantee and the InnovFin MidCap Guarantee, the financial intermediary’s due diligence procedures will determine the timeline.

Table: overview of InnovFin financial instruments

Name

Type

Purpose

Target group

Implemented by

Range

InnovFin Large Projects

Loan

To improve access to risk finance for R&I projects.

Large firms, medium and large midcaps, universities and research institutes, R&I infrastructures, PPPs, Special-purpose vehicles/projects

EIB directly

€7.5 million to €300 million

InnovFin MidCap Grow Finance

Loans, guarantees (incl mezzanine and quasi equity finance)

To improve access to finance

Innovative larger midcaps (up to 3,000 employees), SMEs, Small midcaps

EIB directly

€7.5 million to €25 million

InnovFin MidCap Guarantee

Contingent loans, guarantees

To improve access to finance; to provide a guarantee to financial intermediaries against a portion of their potential losses.

Innovative larger midcaps (up to 3000 employees)

Financial intermediaries (implemented by EIB)

up to €25 million

InnovFin SME Guarantee

Guarantees and counter guarantees on debt financing

To improve access to finance; to provide a guarantee to financial intermediaries against a portion of their potential losses.

innovative SMEs and small midcaps (up to 499 employees)

Financial intermediaries (implemented by EIF)

between €25,000 and €7.5 million

InnovFin Advisory

Advice on the structuring of R&I projects

To improve access to finance

Promoters of large R&I projects that meet the Horizon 2020 Societal Challenges

EIB directly

N/A

SME Venture Capital

Coming soon

Coming soon

Coming soon

EIF

Coming soon