EIF and iwoca sign £40m deal

The agreement is the first under a €2.3 billion EU-backed programme for small to medium sized businesses to be signed in the UK.

The European Investment Fund (EIF) and online lender iwoca has signed their first agreement in the UK under one of the European Union’s initiatives to channel investment into small and medium sized enterprises (SMEs).

The EIF, part of the European Investment Bank, has extended a £40 million (€55.5 million; $60.7 million) credit line through COSME, a €2.3 billion programme set up to help small businesses.

The guarantee scheme, which has financial backing from the European Commission, will allow iwoca to lend £40 million to over 3,000 small businesses in the UK.

The initiative has the support of the European Fund for Strategic Investments (EFSI) through which the investment plan for Europe is being deployed.

EU Commissioner for internal market, industry, entrepreneurship and SMEs, Elzbieta Bienkowska, said: “I am very pleased to see that the investment plan for Europe is becoming a reality on the ground, creating new jobs and benefiting small businesses”.

Small businesses can apply for financing under the programme at www.iwoca.com. The technology platform analyses data points allowing applicants to get approval for up to £100,000 within hours.

EIF chief executive, Pier Luigi Gilibert, said: “I am pleased that we are signing the first EFSI SME guarantee agreement in the UK under the COSME programme. The online lending platform iwoca will give entrepreneurs rapid access to finance to help them create and grow their businesses.”

Iwoca has made 10,000 transactions since its launch in 2012. It operates across the UK, Germany, Spain and Poland. Michael Elalouf, chief financial officer at iwoca, said: “We believe this partnership represents a genuine endorsement of iwoca’s strategy and innovative technology platform. We look forward to expanding our relationship in the future to further meet the needs of SMEs across Europe.”

The EIF loan guarantees portfolio totalled €5.6 billion in over 350 operations at year-end 2014, ranking it as a major European SME guarantee provider and a leading micro-finance guarantor.

EIF’s total net commitments to equity funds amounted to more than €8.8 billion at the end of last year, with investments in over 500 funds, primarily to European venture and growth funds including high-tech and early-stage segments.

At least 60 percent of the COSME programme is devoted to ease access to finance for SMEs in Europe, with two financial instruments. The COSME loan guarantee facility supports guarantees and counter-guarantees to financial institutions to help them provide more loans and lease finance.

Businesses can contact selected financial institutions in their country to access EU financing: http://www.access2finance.eu/