Innov fin midcap growth finance
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Transcript of Innov fin midcap growth finance
A joint initiative launched by European Investment Bank Group
|EIB & EIF| In cooperation with the European Commission.
INNOVFINMIDCAP
GROWTH FINANCE
Expected to make ≥ € 24bn of debt and equity financing available to innovative companies to support € 48bn of final R&I investments.
_ integrated & complementary financing tools and advisory services _ covering entire value chain of research and innovation (R&I) _ Supports investments in smallest to largest enterprise._ available across all eligible sectors under Horizon 2020, in EU Member States
and Associated Countries.
EU FINANCE > INNOVATORS
InnovFin tools cover a wide range of loans and guarantees.Financing is either provided directly or via a financial intermediary, most usually a bank.
FINANCIAL TOOLS
WHAT’S NEW
EU and EIB Group more than doubled their support for innovative firms in Europe.
2007-2013 programming period | FP7|, Risk-Sharing Finance Facility: _ financed 114 RDI projects to the tune of EUR 11.3bn _ signed 29 guarantee contracts with a total guarantee amount of over EUR 1.4bn.
2014-2020 PROGRAMMING PERIOD
INNOVATION > MIDCAP
_ Enables the EIB to lend to innovative companies _ Encourages banks to lend to and make business investment in
innovation_ Improves access to finance for innovative companies
INSTRUMENT OBJECTIVES
An instrument for MidCap Medium to larger companies < 3000 employees
Senior Bank Loan: debt financing obligation, Low risk, long-term
Subordinated Loan: Higher risk loan, ranks below other loans.
EIB DIRECT LOANS
TYPES OF LOANS
TYPES OF INVESTMENTS
Quasi-equity financing: mix of debt and equity in terms of ownership and claim to assets in case of default.
Mezzanine financing: hybrid of debt and equity financing, used to finance expansion of existing company. Debt convertible to ownership/equity interest in case of default.
EIB INVESTMENTS & BANK GUARANTEES
BENEFITS OF EIB
_ Large amounts and in a broad range of currencies_ Attractive interest rates reflecting the promotional nature of the EIB_ offers longer tenors (compared to alternative sources of finance)_ offers flexible growth capital with no or limited dilution for the shareholders_ provides a quality stamp and positive signaling effect,
Catalyst for participation of other banking or financial_ does not offer other banking services such as FX, swaps etc.
(no competition with the company’s house banks)_ Long-term lending strategy, does not sell its exposures to third parties_ Possibility of blending with EU funds_ EIB offers Technical Assistance
innovative products, processes and/or services with a risk of technological or industrial failure as evidenced by business plan. Company should comply with at least one of the following 2 criteria.
COMPANIES PRODUCING/DEVELOPING
ELIGIBILITYCRITERIA
CRITERIUM 1
Measured by employment or turnover:
_ Average annualised growth in turnover ≥ 10% year, over three year period ‐or_ Average annualised growth full time employees ≥ 5% year, three year period ‐ (≥ 100 employees at start of observation period)
FAST-GROWING ENTERPRISE
Company has significant innovation potential and/or is a R&I driven enterprise with ‐ at least one of the following:
_ certified accountants have highlighted R&I expenses/investment in the latest financial statements ≥ 5% of its annual turnover;
_ spend ≥ 80% of EIB loan in R&I expenses/investment in next 36 months as indicated in its business plan;
_ Has received investment from private equity fund ‐ or business angel;
RESEARCH & INNOVATION
CRITERIUM 2.1
_ Previously awarded grants, loans or guarantees from European R&I support schemes (e.g. Horizon 2020 or FP7) or funding instruments (e.g. Joint Technology Initiatives, "Eurostars") or through national or regional research or innovation support schemes over last 36 months;
_ Previously awarded an innovation prize over last 24 months;_ Previously registered at least one patent in last 24 months;_ Has its registered seat in a science, technology or innovation park or
technology cluster or technology incubator (activities relating to R&I);_ Benefited from tax credit or tax exemption related to investment in R&I in
the last 24 months.
CRITERIUM 2.2