EU Stimulus Programs and How Your Business Can Use Them to Get Through COVID-19

Update: We are updating this blogpost to include some non-COVID-19 related funding resources.

To boost domestic industry and SMEs, the European Commission (EC) helps fund projects and organisations.  80% of European Union (EU) funding is done through national managed programmes and/or local financial intermediaries. The remaining 20% of EU funding opportunities come from grants or calls for proposals that are managed directly by the EC.  The Commission also approves state aid schemes in the 27 member states that support EU programmes and policy objectives.  More recently, with the coronavirus pandemic, there have been additional initiatives emerging both at EU and national level to support SMEs overcome the crisis.

Because identifying and understanding all the on-going programmes is not an easy task, we’re here to help you navigate through the different EU and national funding opportunities. To facilitate your research, we’ve compiled a running record of existing initiatives that focus on SMEs

EU-Level Resources launched in response to the COVID-19 Pandemic

Corona Response Investment Initiative (CRII)

What it is:

  • CRII mobilizes cash reserves from the European Structural and Investment Funds (ESIF) to provide immediate liquidity to member state budgets
  • CRII makes €37 billion available to member states for crisis response (healthcare spending, SME support, short term work schemes)
  • CRII is supported by another €28 billion in unallocated EU funds
  • Commission is also amending the rules on structural funds so member states can have flexibility making COVID-19 crisis related expenditures
  • The EU Solidarity Fund will provide €800 million to worst affected countries
  • The Commission approved a temporary framework on state aid (national subsidies) ensuring that businesses of all sizes get the liquidity they require to keep operating and keep their employees. Approved cases of state aid can be found here and here
  • The EU budget will deploy other existing instruments to support these companies with liquidity, complementing measures taken at national level

 

How you can access it:

  • The Commission has established a Task Force for member states to serve as a one-stop shop for questions related to implementation
  • All EU countries will be receiving individual support from CRII (see here)
  • Accordingly, these funds will be distributed directly by member states’ governments (which we cover below)

 

Measures via the European Investment Fund and the European Investment Bank

 

What it is:

  • The EC will redirect €1 billion from the EU budget (EFSI) to function as a guarantee to the European Investment Fund (EIF) to incentivize banks to provide liquidity to SMEs
  • At least 100,000 European SMEs will be able to access around €8 billion of financing this way
  • Existing debtors will be allowed to delay paying off loans to reduce strain on their finances
  • EIF will extend guarantees with higher risk coverage than for normal investment loans to intermediaries
  • European Investment Bank (EIB) will free up another €20 billion in working capital lending to SMEs
  • The new features will be accessible to new as well as existing financial intermediaries already working with EIF

How you can access it:

  • The €8 billion total of working capital loans will be provided via financial intermediaries (i.e., national promotional and/or commercial banks or leasing companies)
  • After expression of interest, financial intermediaries with existing EIF agreements can access the new guarantees immediately. Others will have to go through an application process
  • SMEs can apply directly to their local banks and lenders participating in the program, which will be listed here: access2finance.eu
  • On the “Access to Finance” page, you can select your country and region and find financial intermediaries to work with to receive EU funding

The Eurogroup Coronavirus Rescue Deal

What it is:

  • The EU’s finance ministers agreed to a €540 billion rescue plan (on April 9, 2020)
  • This deal makes €240 billion from the European Stability Mechanism (ESM) available as guarantee spending for member states that are in-debt
  • These funds can only be used to finance COVID-19 related direct or indirect health care, cure and prevention-related costs
  • This deal also includes an additional €200 billion in guarantees from the EIB in loans for EU businesses
  • Finance ministers also agreed to fund a Commission proposal for a jobs support program with €100 billion
  • This deal increases the EU’s fiscal response to the COVID-19 pandemic to €2 trillion, making it the biggest aid package in the world

How you can access it:

  • As this was just agreed upon on April 9, we will update this section when we know more about the details

Other EU-Level Resources for SMEs

The European Scale-Up Action for Risk Capital (ESCALAR) Investment Programme

What it is:

  • ESCALAR is a new investment programme to support venture capital (VC) and growth financing for promising companies to help them scale up
  • This program will provide up to €300 million for investment capacity of VC and private equity funds to support SMEs with up to €2 billion in investments

How you can access it:

  • Interested fund managers can participate by expressing interest until June 30, 2020, here
  • Although only financial intermediaries can currently apply, this program is intended to ultimately benefit SMEs and improve their access to funding.

The EIC Accelerator

What it is:

  • The EIC Accelerator is part of the Enhanced European Innovation Council (EIC) pilot that supports top class innovators, entrepreneurs and small companies with funding opportunities and acceleration services.
  • It is designed for SMEs with radically new ideas underpinned by a business plan for rolling out marketable innovation solutions with ambitions to scale up.
  • Projects will receive between €500,000 and € 2.5 million in the form of grants and should take 12 to 24 months to complete.
  • On 30 April 2020 the EIC Accelerator Pilot was given an additional €150 million through the EIC to support game-changing innovations to tackle the coronavirus crisis.

How you can access it:

EIC Pathfinder Pilot

What it is:

  • The EIC Pathfinder Pilot offers grants of up to €4 million to promote collaborative, interdisciplinary research and innovation on science-inspired and radically new future technologies.
  • These grants are for consortia of at least three entities from three different EU Member States and associated countries.

How you can access it:

  • SMEs may apply through the Future and Emerging Technologies (FET) Open or Proactive schemes.
  • Applications for the 2018-2020 have closed for the FET Open scheme. A new application period is expected to start in 2021.
  • It is still possible to apply for funding through the FET Proactive scheme.

The InvestEU Programme

What it is:

  • The InvestEU Programme will mobilise public and private investment through an EU budget guarantee of €75 bn
  • It will back the investment projects of implemexnting partners (such as the EIB Group) in order to increase their risk-bearing capacity.
  • A new proposal from May 29, 2020, increases the InvestEU budget to reflect higher investment needs and a higher risk environment due to the COVID-19 pandemic
  • The new proposal includes the allocation of an additional €10 bn for SMEs.

How you can access it:

  • SMEs can apply at their local commercial or public banks whose financial products are covered by the EU guarantee in their country or region.
  • The local intermediary will then inform them if a particular financing programme is covered by the InvestEU Fund.

Recovery Assistance for Cohesion and the Territories of Europe (REACT-EU)

What it is:

How you can access it:

  • REACT-EU funding will be distributed among Member States who will be able to decide exactly how to allocate funds.

Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME)

What it is:

  • The COSME Programme offers guarantees to small and medium-sized enterprises for loans up to €150,000 as well as equity during an SMEs growth and expansion stage.
  • The COSME Programme is managed by EASME, the Executive Agency for Small and Medium-sized Enterprises.

How you can access it:

  • These financial instruments are channelled through local financial institutions in EU member states.
  • SMEs apply to these local institutions directly. To find a local institution, visit the Access to Finance

Enterprise Europe Network (EEN)

What it is:

  • EEN is the world’s largest support network for SMEs with international ambitions.
  • Co-funded by the EU’s COSME and Horizon 2020 programmes, the Network’s aim is to help businesses innovate and grow internationally.
  • It offers SMEs international partnerships, advice for international growth and support for business innovation.

How to access it:

  • You can find local network contact points or international partners on the EEN website.

Fast Track to Innovation (FTI)

What it is:

  • The FTI is part of the Enhanced European Innovation Council pilot, which also serves as the umbrella for the EIC Accelerator above.
  • The FTI provides funding for relatively mature ground-breaking technologies, concepts and business models which are close to market.
  • Proposals for funding must be submitted by consortia of three to five legal entities established in a least three different EU Member States and associated countries.
  • Grants of up to €3 million may be awarded.

How you can access it:

  • Like the EIC Accelerator, the FTI is a continuously open call with regular cut-offs.
  • The next application deadline is 27 October 2020.

You can read more about FTI here and apply here.

Upcoming Funding Opportunities

Sponsored by Aimed at Funding Application deadline
ESCALAR Pilot Scale-ups Varies 30 June 2020
Block.IS SMEs working with Blockchain Up to €60,000 22 July 2020
EIC Accelerator Pilot SMEs Varies 07 October 2020
Fast Track to Innovation Mature SMEs established in multiple member states Up to €3 million 27 October 2020
MedTech Open Innovation Testbed MedTech SMEs performing COVID-19 related developments Varies Applications open 15 September 2020

 

Most EU funding will be distributed through managing authorities in the member states as illustrated above. Source: www.access2finance.eu

We will be updating this page as more measures are passed in the coming weeks, but if you have any questions please let us know!