European Investment Bank (EIB)
FINANCING WITH EUROPEAN INVESTMENT BANK (EIB”)
Societe Generale Equipment Finance Limited provides advantageous financing in partnership with the European Investment Bank
Who is the European Investment Bank?
The European Investment Bank (EIB) is a non-profit bank owned by European Union member states. Unlike commercial banks, it does not administer personal accounts, have branches or provide investment consultancy services to individuals. EIB provides long-term credits for capital investment projects that assist and encourage the development of companies and infrastructure (in particular long-term projects). It cooperates with the European Commission in the administration of subsidy and subvention programs.
Who may become the recipient of financing from EIB?
The financing is for agreements with small and medium companies (“SME’s”). SGEF would typically finance agreements under this scheme where the asset cost is in excess of £25,000.
Small and medium companies
Which companies are considered to be small and medium?
In order to qualify for the funding, the decisive criterion is the number of employees, which must not exceed 250. Where entities are connected through capital, this criterion is compared with the number of employees in the group of associated companies. If the co-owner of a company is a company with more than 250 employees, then its share in the registered capital must not exceed 25%.
What are the conditions of financing for small and medium companies?
The total costs of a project that is financed must not exceed EUR 25 million. Financing under this EIB scheme is possible up to the 100% value of the total project costs, however not more than EUR 12.5 million.
What total the project costs mean?
Total project costs mean acquisition of movable and immovable objects (lands, buildings, machines, and devices) related to implementation of the project, expenses for expert surveys and research related to the project and the permanent increase of the working capital related to the implementation of the project.
For what period may the financing be provided?
The minimum time of financing is 36 months. The longest period of financing machines, devices and other movable objects is 10 years.
What objects may be financed by means of EIB?
Financing may be applied to most equipment financed by SGEF. Companies involved in the areas of gaming and betting or research carried out on animals or operating in industries with a significant adverse impact on the environment are excluded from the scheme.
What financial products are eligible?
Most products offered by SGEF are eligible.
Is utilisation of the EIB program administratively demanding?
There is no impact in terms of administration for the lessee, with the only additional item of documentation being confirmation of acceptance of some additional terms required by the EIB to enable the lessee to access funding under this scheme. All additional administration is undertaken by SGEF. The only restriction that the EIB imposes is that transfer of the finance contract to another lessee during its duration is not allowed.
What are the advantages of financing using the EIB funding?
The main advantage for the lessee is an interest rate that is at least 0.25 % p.a. lower than that which would otherwise be offered by SGEF. This reflects the lower costs for SGEF in obtaining finance from the EIB. This amount will be paid by SGEF to the lessee at the start of the deal as a cash rebate.
For more information please contact either:
Direct Tel +44 (0)20 8973 2030
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