The European Commission and the European Investment Fund (EIF) launched a €121 million guarantee initiative to support SMEs in the cultural and creative sectors via financial institutions.

This scheme is expected to create more than €600 million worth of bank loans over the next six years.

The initiative allows the EIF to provide guarantees and counter-guarantees, free of charge, to selected financial intermediaries in order to enable them to provide more debt finance to entrepreneurs in the cultural and creative arena.

Guarantee institutions, commercial and promotional banks as well as other financial intermediaries benefiting from the €121 million guarantee will support more than 10,000 SMEs in a wide range of sectors such as audiovisual (including film, television, animation, video games and multimedia), festivals, music, literature, architecture, archives, libraries and museums, artistic crafts, cultural heritage, design, performing arts, publishing, radio and visual arts.

The financial instrument, set up under Creative Europe – the main EU programme dedicated to the cultural and creative sectors, will be managed by the EIF on behalf of the European Commission. European SMEs should benefit from it as early as of the end of this year.

The creative and cultural sectors represent more than seven million jobs in the EU and account for 4.2 per cent of the EU’s GDP. Access to finance can be difficult for these sectors, primarily due to the intangible nature of their assets and collateral, the limited size of the market, demand uncertainty, and lack of financial intermediary expertise in addressing sector specificities.

In the coming days, the EIF will publish a call for expressions of interest to which eligible financial institutions will be able to apply. After a thorough selection process, the EIF will select financial intermediaries which can then make the new finance available to SMEs in the targeted sectors. Financial intermediaries will report thoroughly on the financial products they will propose to SMEs and their take-up.

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