European leasing trade association Leaseurope has published guidance for lessors looking to access finance from the European Investment Fund.
The document shows how lessors can gain funding through structured finance, the Competitiveness of Enterprises and SMEs (COSME) loan guarantee facility, or InnovFin SME Guarantee Facility.
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The document also explains how lessors can take part in the the first loss portfolio guarantee under regional mandates (FLPG), a financial instrument designed to spread risk.
Under the FLPG, leases to SMEs are supported by a partial guarantee covering losses up to a predefined cap. The benefit that the leasing company derives from the FLPG is then passed on to the SMEs (as a pricing and/or collateral reduction).
The document states: "EIF is an AAA rated European institution with Multilateral Development Bank status. As of the end of 2014, EIF’s outstanding portfolio of guarantees and securitisation transactions amounted to 5.6bn, positioning it as a major European SME guarantee actor and a leading micro-finance player."
The document can be accessed here.
