The current global pandemic has caused companies across the globe to struggle financially. The European Union has implemented a number of measures to help support companies affected by COVID-19, one of which is the Pan-European Guarantee Fund.
The Pan-European Guarantee Fund is a program established by the European Investment Bank (EIB) to support small and medium-sized enterprises (SMEs) affected by the pandemic. The program aims to provide SMEs with access to financing and help them maintain their business operations during these uncertain times.
One of the key components of the Pan-European Guarantee Fund is the guarantee agreement. In this agreement, the EIB guarantees a portion of the loans provided by financial institutions to SMEs. This lowers the risk for financial institutions and makes it easier for them to provide funding to SMEs.
Under the guarantee agreement, SMEs can access loans up to €25 million with a maturity of up to six years. These loans can be used to cover a wide range of expenses, including working capital, investment, and refinancing existing debt.
SMEs that are eligible for the Pan-European Guarantee Fund must be located in a European Union member state or a country that has signed an association agreement with the EU. These SMEs must also employ fewer than 3,000 people and have an annual turnover of less than €50 million.
It is worth noting that the guarantee agreement does not cover 100% of the loan amount. Instead, the EIB guarantees up to 80% of the loan, while the financial institution providing the loan covers the remaining 20%.
The Pan-European Guarantee Fund has been a vital tool in supporting SMEs and protecting jobs during the pandemic. This program has already provided billions of euros in financing to SMEs across Europe, and it is expected to continue supporting businesses in the months to come.
In conclusion, the guarantee agreement under the Pan-European Guarantee Fund is an excellent resource for SMEs struggling to stay afloat during the COVID-19 pandemic. This program provides SMEs with access to much-needed financing, and the guarantee agreement lowers the risk for financial institutions providing these loans. If you are an eligible SME, we encourage you to explore this program further and take advantage of the support it provides.