The European Commission and European Investment Bank (EIB) have launched a new guarantee facility to help small and medium-sized enterprises (SMEs) access bank loans, in a bid to encourage growth and competitiveness across Europe.

An earlier scheme, the Risk-Sharing Finance Facility, was introduced in 2007 and has helped secure around €7 billion in EIB loans for innovation projects. Experts hope that the new risk-sharing instrument, supported by the European Investment Fund (EIF), will encourage banks to provide loans and leases of between €25,000 and €7.5 million to small and medium-sized firms undertaking research, development or innovation.

“Without raising its potential through research and innovation, Europe will be unable to generate the growth it needs to maintain its place in the world economy," said European Investment Bank President, Philippe Maystadt.

"The Risk-Sharing Finance Facility has already helped many large and mid-cap companies realise their plans. With the changes we are announcing, we are confident that SMEs will now also benefit."

Around €6 billion of loans is expected to be made available until the end of 2013. As of 2014, the Commission will scale up equity finance and expand the RSFF as part of the research and development programme Horizon 2020.

Find out more on the EIB website