Although UK lessors have not
so far showed much interest in loans to SMEs provided by the EU’s
European Investment Bank, their large continental counterparts are
doing so in droves
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The large amount of credit lines
recently provided by the European Investment Bank (EIB) to leasing
companies has shown the extent of the efforts made by the EU’s
long-term lending institution to support SME-sized businesses,
particularly those which are finding it more difficult than ever to
get funds on advantageous terms.
One of the most recent examples was a €60
million credit line allocated to Romania’s EFG Leasing last month –
the third funding of its kind between the EIB and a Romanian
lessor. This loan was to support small-scale projects in Romania in
the industry, agriculture, tourism, health and energy sectors.
But this is only the latest in a series of
credit lines allocated in the last 12 months to the likes of
UniCredit Leasing, SG Equipment Finance, Dexia Lease and MPS
Leasing e Factoring, and evidence suggests that the volume of these
kinds of EIB loans has grown rapidly since the beginning of 2008
until today.
According to Paola Polverini, who is in charge
of EIB projects at Italy’s MPS Leasing e Factoring, the EIB selects
intermediary financing institutions primarily on the basis of their
credit rating.
“However, it is also essential that lessors
have a large SME customer base because credit lines are allocated
at better financial conditions provided that part of the benefits
is passed on to their SME clients,” Polverini added.
The EIB financing being channelled to SMEs
through lessors includes two types of loans.
The first type is provided for specific
projects – such as the building of wind farms – and requires a
final beneficiary to be identified before the loan is given.
The second type is for “global projects”, with
a credit line given to a lessor for a given time. In this case,
although credit lines vary on a case-by-case basis, the EIB may
indicate the sectors and the geographic areas to cover.
Wide range of sectors
For instance, the €250 million
credit line given last December to MPS Leasing covered a wide range
of sectors, but with a preference to micro-sized businesses and
Southern Italy-based companies.
The EIB decides the criteria upon which
decisions are made to determine which companies can access loans.
However, it is the leasing companies that make the final decision
about which particular companies they decide to give the loans
to.
Also, although the main focus is within the
EU’s borders, there are others which benefit from the EIB credit
lines, such as Turkey (largely because it is a candidate country to
the EU). Turkey’s largest lessor, Garanti Leasing, was one of the
country’s first companies to receive an EIB loan of this kind.
Cerm Surmen, head of treasury at the
Istanbul-based lessor, commented: “The EIB was keen to work with
us, because Garanti’s average contract size is one of the smallest
in the country which means we have one of the highest numbers of
clients on board.”
Surmen said that each credit line varies
depending on the projects being financed. The €100 million-loan
given to Garanti, for instance, was used all in one tranche,
because the lessor already had a client base which was ready to
utilise the loans.
