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EU Investment Bank, Santander to provide €500M in loans to Spanish SMEs

bank loan spanish startups
Written by Tim Hinchliffe

The European Investment Bank (EIB) together with Santander will provide €500 million in loans to Spanish startups and small businesses in order to boost economic growth and job creation.

This €250 million EIB agreement under the European Fund for Strategic Investments will enable Santander to lend €500 million to small Spanish companies

The loan is supported by the Investment Plan for Europe, which allows the EIB to finance projects that, due to their structure or nature, have a particular added value and a higher risk profile.

bank loan spanish startups

Emma Navarro

At the signing ceremony in Madrid, the EIB vice-president, Emma Navarro, remarked, “Ensuring that SMEs have the financing they need to invest in enhancing their competitiveness is one of the EIB’s priorities.

“We are therefore delighted to be signing an agreement which demonstrates via its innovative character the EIB’s determination to find new ways of ensuring that small and medium-sized enterprises continue to benefit from the advantages of our financing. Last year, 57% of our total financing in Spain went to SMEs.”

Navarro has been General Secretary of the Treasury and Financial Policy in Spain and Member of the Bank of Spain Governing Council and Board Member of the Spanish National Securities Market Commission.

Under this financing facility, the EIB will participate in a EUR 250 million portfolio of corporate loans and Banco Santander will be able to provide EUR 500 million of financing for the investments of small and medium-sized enterprises.

bank loan spanish startups

Jyrki Katainen

“Thanks to the support of the European Investment Plan, the EU has already helped some 700,000 SMEs across Europe to access the financing they need,” said Jyrki Katainen, European Commission Vice-President for Jobs, Growth, Investment and Competitiveness.

“This EUR 250 million EIB agreement under the European Fund for Strategic Investments (EFSI) will enable Santander to lend EUR 500 million to small Spanish companies. It is an excellent example of how the financial instruments guaranteed by the EU help to attract private sector investment for our entrepreneurs and their projects, increasing local employment rates,” he added.

Katainen was previously Prime Minister of Finland from 2011 to 2014 and chairman of the National Coalition Party from 2004 to 2014.

This agreement is the second of its kind signed between the EIB and Banco Santander.

The previous one, also granted under the Investment Plan for Europe, has already benefited more than 3,500 companies. The average loan to beneficiary SMEs granted under this agreement was €180,000, and more than 30% of the beneficiary companies are located in convergence regions.

bank loan spanish startups

Rami Aboukhair

“Banco Santander is a pioneer in the development of credit lines with the EIB that adapt to the investment and liquidity needs of strategic sectors of our economy, always with very advantageous conditions for the client,” said Rami Aboukair, CEO of Santander Spain.

“Our priority is to provide SMEs with the financial support and personal service they need 24 hours a day, with financial products and solutions, such as the 1I2I3 strategy, tailormade to the requirements of each business,” he added.

The Investment Plan for Europe, known as the “Juncker Plan,” is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.

The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides first loss guarantees, enabling the EIB to invest in more projects that often come with greater risks. EFSI has already yielded tangible results. The projects and agreements approved for financing under EFSI are expected to mobilise more than EUR 335 billion in investment and support 700 000 SMEs in the 28 Member States.

SMEs represent 99% of businesses in the EU and employ two thirds of the active working population. Supporting access to finance for SMEs and mid-caps is a top priority for the EIB Group, according to EIB.

About the author

Tim Hinchliffe

Tim Hinchliffe the editor in chief at Novobrief. Previously, he was a reporter for The Ghanaian Chronicle in West Africa, and Colombia Reports in South America. Principal at Espacio.