Access to risk finance
Under 'Access to Risk Finance', Horizon 2020 will help companies and other types of organisation engaged in research and innovation (R&I) to gain easier access, via financial instruments, to loans, guarantees, counter-guarantees and hybrid, mezzanine and equity finance.
The priority for 2014-2015 is, above all, to continue and build on activities that have proved their worth in supporting R&I in 2007-2013: the Risk-Sharing Finance Facility (RSFF) and the Risk-Sharing Instrument for SMEs (RSI) in the Seventh Framework Programme (FP7), together with GIF-1, the early-stage part of the High-Growth & Innovative SMEs Facility in the Competitiveness & Innovation Framework Programme (CIP). Horizon 2020's financial instrument facilities will operate in conjunction with those of COSME, the successor to CIP.
The coming two years will also see a significant participation by Horizon 2020 in the proposed SME Finance Initiative; the launch of a pilot facility supporting the technology transfer process; and a new focus on improving access to risk finance by larger midcap firms. In addition, firms of all sizes, together with other types of organisation, will be able to get advice on how to make themselves more attractive to banks and potential investors. And to help prepare for new developments, studies will look into how best to encourage more business angel and crowd-funding investments in R&I; into the potential for pan-European venture capital (VC) funds-of-funds; and at the possibilities for an EU prizes scheme.
As in the previous programmes, debt and equity facilities will be run in a demand-driven manner, though the priorities of particular sectors or of other EU programmes will be targeted if top-up funding is made available, including from managing authorities wishing to invest part of their European Structural & Investment Funds (ESIF) programme contribution. The focus remains on attracting private investments into R&I. As before, firms and other entities located in the EU or in non-EU countries associated with Horizon 2020 are eligible as beneficiaries unless otherwise specified6.
The European Investment Bank (EIB) and the European Investment Fund (EIF) will play an important role, as entrusted entities, in implementing each financial instrument facility on behalf of and in partnership with the European Commission7. For EIF, this role includes (as under FP7 and CIP) conducting calls for expressions of interest for selecting the financial intermediaries, such as banks and risk-capital funds, that will make the actual loans to or investments in SMEs and small midcaps. While EIB will make large loans directly, it will also be able to use financial intermediaries as well, particularly when supporting medium and large midcaps8. Exploratory talks with other financial institutions of comparable stature are underway, and in future one or more may join EIB and EIF in running facilities for the European Commission.