EIF

Innovfin SME Guarantee Facility

RCB Bank Ltd is the first financial institution in Cyprus, which has signed an agreement with the EIF to promote the “InnovFin SME Guarantee Facility’’ in Cyprus. The aim of the facility is to promote increased access to finance to innovative SME and Small Mid-Cap entities (up to 499 employees) by providing them with debt financing on more favourable terms. The InnovFin SME Guarantee benefits from the support of the European Fund for Strategic Investments, which is a central pillar of the European Commission's Investment Plan for Europe.

Final Recipient Transaction is supported by the InnovFin SME Guarantee Facility, with the financial backing of the European Union under Horizon 2020 Financial Instruments and the European Fund for Strategic Investments (EFSI) set up under the Investment Plan for Europe. The purpose of EFSI is to help support financing and implementing productive investments in the European Union and to ensure increased access to financing.

Beneficiaries of the ’The InnovFin SME Guarantee Facility’’

Final Recipient Criteria

Company category Headcount Turnover or Balance sheet total
SME < 250 (FTE) ≤ € 50 m ≤ € 43 m
Small Mid-cap ≤499 (FTE) and not an SME N/A N/A
FTE: Full-time equivalents

Only Final Recipient Transactions meeting the Eligibility Criteria can be covered by the Guarantee

Form
Final Recipient Transactions which are loans may take the form of a term loan or a revolving facility.

Purpose
Final Recipient Transactions may finance tangible or intangible assets (including goodwill), working capital or business transfers.

Term

From 12 months up to 10 years

Loan Amount

From €0.25m to €4m

Eligibility Criteria

Innovation Eligibility Criteria

Final Recipients should comply with at least one Innovation Eligibility Criteria below:

Code Short description Description
1 Innovation products/processes/services i – The Final Recipient intends to use the Final Recipient Transaction to invest in producing or developing or implementing new or substantially improved (i) products, processes or services, or (ii) production or delivery methods, or (iii) organizational process innovation including business models that are innovative and where there is a risk of technological or industrial or business failure as evidenced by an evaluation carried out by an external expert
2 Fast-growing enterprise ii -The Final Recipient is a “fast-growing enterprise”, which is an SME or a Small Mid-cap operating in a market for less than 12 years following its first commercial sale and with an average annualised endogenous growth in employees or in turnover greater than 20% a year, over a three-year period, and with ten or more employees at the beginning of the observation period
3 R&I Costs 5% iii - The Final Recipient has been operating in a market for less than 7 years following its first commercial sale and its R&I Cost represent at least 5% of its total operating costs in at least one of the three years preceding the Final Recipient’s application for the Final Recipient Transaction, or in the case of an enterprise (and particularly a start-up) without any financial history, according to its current financial statements
4 Innovation expenses iv.a The Final Recipient’s R&I annual expenses are equal or exceed 20% of the Final Recipient Transaction amount as per Final Recipient’s latest statutory financial statements, under the condition that the Final Recipient’s business plan indicates an increase of its R&I expenses at least equal to the Final Recipient Transaction amount
5 80% R&D and/or innovation iv.b The Final Recipient undertakes to spend an amount at least equal to 80% of the Final Recipient Transaction amount on R&I activities as indicated in its business plan and the remainder on costs necessary to enable such activities
6 Innovation support iv.c The Final Recipient has been formally awarded grants, loans or guarantees from European R&I support schemes (e.g. Horizon 2020 or FP7) or through their funding instruments (e.g. Joint Technology Initiatives or "Eurostars") or regional, national research or innovation support schemes over the last 36 months, under the condition that the Final Recipient Transaction is not covering the same expense
7 Innovation prize iv.d The Final Recipient has been awarded over the last 24 months an R&D prize or Innovation prize provided by an EU institution or an EU body
8 Technology right iv.e The Final Recipient has registered at least one technology right in the last 24 months, and the Final Recipient Transaction purpose is to enable, directly or indirectly, the use of this technology right
9 Venture-capital iv.f The Final Recipient is an early stage SME and has received an investment over the last 24 months from a venture-capital investor or from a business angel being a member of a business angels network; or such venture capital investor or business angel is a shareholder of the Final Recipient at the time of the Final Recipient’s application for the Final Recipient Transaction
10 Risk finance investment iv.g The Final Recipient requires a risk finance investment which, based on a business plan prepared in view of entering a new product or geographical market, is higher than 50% of its average annual turnover in the preceding 5 years
11 R&I Costs 10% iv.h The Final Recipient’s R&I Costs represent at least 10% of its total operating costs in at least one of the three years preceding the Final Recipient’s application for the Final Recipient Transaction, or in the case of an enterprise without any financial history, as per its current financial statements;
12 R&I Costs (Small Mid-Cap) iv.i The Final Recipient is a Small Mid-cap and its R&I Costs represent: (A) either, at least 15% of its total operating costs in at least one of the three years preceding the Final Recipient’s application for the Final Recipient Transaction; (B) or, at least 10% per year of its total operating costs in the three years preceding the Final Recipient’s application for the Final Recipient Transaction.
13
(if applicable)
Support measures iv.j The Final Recipient has incurred R&I expenses qualified in the past 36 months by competent national or regional bodies or institutions as part of general support measures approved by the European Commission and designed to incentivize companies to invest in R&I, provided that i) such body or institution is independent of the Financial Intermediary and the Final Recipient and ii) the Final Recipient Transaction covers incremental expenditure as indicated in the Final Recipient’s business plan and iii) the Final Recipient Transaction is not covering the same eligible costs already supported by aforementioned measures
14
(if applicable)
Innovative company iv.k The Final Recipient has been designated in the past 36 months as an innovative company by an EU or national or regional institution or body, provided that in each case (A) the designation is based on the publicly available criteria where such criteria:
• shall not be limited to or otherwise favour any particular industry or sector, and
• shall reflect at least one of the Innovation Eligibility Criteria except the Innovation Eligibility Criterion referred to in item (iv) (d), or shall reflect the substance of at least one of these criteria but shall not be less stringent; and (B) the body or institution is independent of the Financial Intermediary and the Final Recipient; and (C) the Final Recipient Transaction covers incremental expenditure as indicated in the Final Recipient’s business plan.
Other Criteria
  • Recent audited financial statements and a business plan, demonstrating repayment ability among other qualified documents relating to the above Innovation Eligibility Criteria
  • Equity contribution of at least 30%
  • Satisfactory collateral package and clean credit record
  • Satisfactory authorization under KYC and KYCB criteria/procedures

The Bank has the right to reject any credit facility application.