The European Investment Fund (EIF) has signed an agreement with Santander UK to increase lending to innovative small and medium-sized enterprises (SMEs) and small Mid-caps in the UK. This is the first transaction in the UK to benefit from the support of the European Fund for Strategic Investments which will be deployed by the European Commission and the EIB Group.
The new agreement allows Santander UK to provide EUR 140m (GBP 100m) finance to innovative companies in the UK over the next 2 years. The loans will be backed by a guarantee of the EIF, enabled by the InnovFin initiative with financial backing from the Commission's Horizon 2020 programme. Under the new programme Santander UK will offer innovative companies additional financing at more favourable rates.
European Commission Vice-President Jyrki Katainen, responsible for Jobs, Growth, Investment and Competitiveness, said: "I am very pleased that the EIF and Santander UK, with the backing of the European Fund for Strategic Investments, today sign a deal for GBP 100m to be lent to British start-ups. I am in the UK this week and I look forward to discussing this and how the UK can benefit from the Investment Plan with government, businesses and investors."
Commenting on the signature, EIF Chief Executive, Pier Luigi Gilibert said: “I am pleased to be signing the first EFSI deal in the UK with Santander UK that will reinforce investment by companies across the country. Providing support through Santander UK will ensure that many more innovative companies can access finance over the next two years”.
Steve Pateman, Head of UK Banking at Santander, said: “Santander is committed to bringing greater choice and competition to UK banking industry. Supporting and driving innovation is a central pillar in Santander’s growth plans to become the bank of choice for ambitious UK businesses. SME’s need access to multiple sources of finance, our agreement with the European Investment Fund allows us to further boost support for innovative SMEs at discounted rates, helping to create jobs and drive local economic growth”.
The aim of the InnovFin SME Guarantee is to encourage banks or other financial institutions to lend to SMEs and small mid-caps (firms with fewer than 500 employees) in need of investment and/or operating capital to finance research, development and innovation activities, with EU financial support. Financial institutions are being selected by the EIF following expressions of interest from financial institutions across Europe.
This is one of the first transactions approved by EIF which will benefit from an EU guarantee under EFSI. This deal has been signed before EFSI is formally established, reflecting the EIB Group’s commitment to respond swiftly to calls from Member States, the European Commission and the European Parliament for a rapid launch of concrete initiatives under EFSI, accelerating lending and guaranteeing transactions capable of boosting jobs and growth in the EU.
The European Investment Fund's (EIF) central mission is to support Europe's micro, small and medium-sized businesses (SMEs) by helping them to access finance. EIF designs and develops venture and growth capital, guarantees and microfinance instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total net commitments to private equity funds amounted to over EUR 8.8bn at end 2014. With investments in over 500 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in high-tech and early-stage segments. EIF’s guarantees loan portfolio totalled over EUR 5.6bn in over 350 operations at end 2014, positioning it as a major European SME guarantees actor and a leading micro-finance guarantor.
Santander UK is a financial services provider in the UK that offers a wide range of personal and commercial financial products and services. It has brought real competition to the UK, through its 1|2|3 products for retail customers and relationship banking model for UK SMEs. As at 31 December 2014, Santander UK was the most switched to bank, attracting 1 in 4 new retail customers. The bank serves more than 14 million active customers with c. 20,000 employees and operates through 921 branches and 66 regional Corporate Business Centres. Santander UK is subject to the full supervision of the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) in the UK. Santander UK plc customers are protected by the Financial Services Compensation Scheme (FSCS) in the UK.
Banco Santander (SAN.MC, STD.N, BNC.LN) is a leading retail and commercial bank, based in Spain, with a meaningful market share in 10 core countries in Europe and the Americas. Santander is the largest bank in the euro zone by market capitalization and among the top 12 banks on a global basis. Founded in 1857, Santander had EUR 1.43 trillion in managed funds, 12,950 branches and 185,400 employees at the close of 2014. In 2014 Santander made an attributable profit of EUR 5,816 million, 39% more than the previous year.
About the Investment Plan for Europe
Investment Plan for Europe website
EIF: David Yormesor
Tel.: +352 42 66 88 346, e-mail: email@example.com
Santander UK: Bijal Tanna
Tel.: +44207 756 4189/ 07860 259 217, e-mail: Bijal.firstname.lastname@example.org
European Commission: Lucia Caudet / Annika Breidthardt
Tel.: +32 2 29 56182, email: email@example.com / Tel.: +32 229 56153, email: firstname.lastname@example.org
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