Filling the growth gap

Josie Mander, Senior Product Manager at Santander Corporate & Commercial, highlights the benefits to SME businesses of accessing European Investment Bank (EIB) discounted rate funding.

Q: What is EIB Funding?

A: This year, the European Investment Bank (EIB), owned by the 28 EU member states, has provided more than €21 billion for SMEs across Europe. This engagement with local high-street banks, including Santander in the UK, Spain and Portugal, is helping to stimulate growth and jobs by making available new and lower cost loans.

EIB President Werner Hoyer stated: “I am proud to announce that the EIB Group has now delivered more than €21 billion to support European SMEs and mid-cap companies this year. This is more than we had expected and it shows that the EIB Group remains strongly committed to the creation of jobs and growth in the EU.”

Through engagement with EIB, Santander is supporting UK SMEs by providing access to an invaluable source of lower cost finance. This is in the form of a 0.5% discount on our standard loan pricing. We are the only UK Bank to offer this support to SMEs and we currently have £200 million of discounted loans to lend. There is also EIB Funding available for Higher and Further Education institutions.

Q: What are the benefits of EIB Funding?

A: Santander is committed to supporting SME businesses and recognises that for many access to cheaper finance is crucial to enable their business to flourish. Therefore we are delighted to be able to offer this discount of 0.5% for loans up to five years to SME businesses which meet the eligibility criteria.

Q: What is the application process?

A: The underlying loan or transaction would be subject to our normal due diligence procedures, so we may require a business plan, including projections, depending on the level and complexity of finance required. The application for the EIB discount itself is very straightforward and is simply a case of ensuring that the underlying transaction meets the EIB criteria. However, in all cases, a dedicated local Relationship Director is available to discuss all finance options available.

Q: Are there limitations on the businesses which can access EIB Funding?

A: Some activity is not eligible, for instance the financing of pure real estate development and investment, but the funding is available to a wide variety of industry sectors – with a maximum loan of €12.5 million. We can extend EIB discounted funds for larger projects, which are subject to slightly different eligibility criteria, but in all cases our Relationship Directors are more than happy to discuss this.

The loans must be used for investment purposes and there is a minimum term of two years. The funds can be used for working capital, but cannot be used to re-finance existing debt.

Q: Do you have any examples of businesses which are benefitting from accessing Santander's EIB Funding?

A: We have seen funds used for a host of different purposes, supporting SMEs from a variety of sectors, for example care homes, dentists, shops and farms. Since partnering with EIB we have helped to support over 320 SMEs with this type of funding.

For more information about how to access EIB Funding, please contact your local Relationship Director

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