Today, the European Commission has announced a €121 million guarantee initiative to support SMEs in the cultural and creative sectors, via financial institutions. It is hoped that the launch of this scheme will create in excess of €600million worth of bank loans within the next six years.
The basis of the recently announced initiative is that it will allow the EIF to offer free of charge guarantees to financial intermediaries with the goal of enabling them to offer more debt finance to entrepreneurs operating in the cultural and creative sector. With a total of €121 million in guarantees available, it is hoped that in excess of ten thousand SMEs could benefit from the new scheme. Sectors that will be supported will include; libraries and museums, cultural heritage, performing arts, publishing, radio, visual arts, film/television, animation, video games, festivals, music, architecture, literature and archives amongst others.
The idea behind the scheme is to give SMEs the opportunity to benefit from loans which they would not necessarily have had access to before. The creative and cultural sector employs over 7 million people across the 28 member states but they have historically not found it easy to gain financing for their projects. This is due, in part to the intangible nature of their assets and collaterals as well as uncertainty and a lack of expertise in the sector from financial intermediaries.
Creative Europe is an EU programme that was set up to promote and support the cultural and creative sectors across Europe. This new financial instrument is set up under this programme and will be managed by the EIF, with SMEs expected to start benefiting from the end of 2016.