InnovFin SME Guarantee Facility

  • Loan amount

    €25,000 - €100,000 for Start-Ups and €50,000 - €500,000 to all beneficiaries.

  • Loan Duration

    From 12 to 120 months.

  • Grace period

    Maximum 2 years. 

Answers to all of your questions

  • The Bank of Cyprus and the European Investment Fund (EIF) have signed an agreement for the InnovFin SME Guarantee Facility. Under this agreement, the EIF provides guarantees on €10 million financing on favourable terms to innovative businesses, with an emphasis on start-up companies which allow financing without using tangible assets as collateral. The scheme’s aim is to finance the cost necessary for promoting innovation such as investment in assets and working capital.

  • Companies which are established, registered and operate in Cyprus.

    SMEs employing up to 249 persons with an annual turnover up to €50million or an annual balance sheet (based on financial statements) not exceeding €43million

    Small Mid-caps employing between 250-499 persons.

    Companies which comply with at least one of the innovation criteria.

    Non-listed companies

    Companies which are not active on the following sectors or activities:

    Illegal economic activities according to national laws or regulations, including human cloning for reproduction purposes

    Tobacco products and distilled alcoholic beverages

    Production of and trade in weapons and munition

    Casino and gambling

    IT companies engaged in activities related to internet gambling, online casinos, pornography or any other activity as mentioned above

    Companies in the Life Sciences Sector dealing with:

    human cloning / creation of embryos for research or therapeutic purposes,

    genetically modified organisms (GMOs), except when appropriate specific assurance is given on the control of legal, regulatory and ethical issues linked to such human cloning for research or therapeutic purposes and / or GMOs

  • For Start-Ups and for a loan amount €25,000 to €100,000: Guarantees only due to the guarantee provided by the European Investment Fund.

    For loans of €50,000-€500,000 available to all beneficiaries: Reduced collateral requirements due to the guarantee provided by the European Investment Fund.

  • Ranges from 6M Euribor + 3.20% to 6m Euribor + 4.50%.

    Fees and commissions as per the Bank's price list.

  • Innovation Criteria

    Companies which comply with at least one of the Innovation criteria:

    Innovative products/processes/ services

    Final Recipient intends to use the funds to invest in producing, developing or implementing new or substantially improved (i) products, processes or services, or (ii) production or delivery methods, or (iii) organisational or process innovation including business models that are innovative and where there is a risk of technological, industrial or business failure, presented in a report by an external expert.

     

    Fast-growing enterprise

    Final Recipient is operating for less than 12 years, with an average annualized employee or turnover growth greater than 20% a year, over a 3-year period. Final Recipient must have 10 or more employees at the beginning of the observation period.

    5% of operating costs on R&I

    Final Recipient is operating in a market for less than 7 years, whose R&I costs represent at least 5% of its total operating costs, in at least one of the 3 years preceding the loan application. In case of a Final Recipient (eg. Start-up) without financial history, the calculation is done using its current financial statements.

    Annual R&I expenses ≧ 20%

    Annual R&I expenses are ≧20%  of the requested loan amount, under the condition the Final Recipient’s business plan indicates the increase in R&I expenses is at least equal to the requested loan amount

    80% of funds spent on R&I activities

    Final Recipient undertakes to spend at least 80% of the loan amount on R&I activities. Condition: the remaining 20% to be spent on costs necessary to enable such activities.

    Innovation support/grants

    Final Recipient has been formally awarded grants, loans or guarantees from European R&I schemes (Horizon 2020/FP7) or national research or innovation support schemes. Condition: over last 3 years and the final recipient transaction should not be covering the same expense.

    R&D Prize

    Final Recipient has been awarded over the last 24 months with an R&D prize or innovation prize, provided by an EU institution or an EU body.

    Technology right

    Final Recipient has registered at least one technology right in the last 24 months, and the purpose of the loan is to enable the use of this technology.

    Technology right could be a patent, utility model, topography, semiconductor product, supplementary protection certificate of medicinal products, plant breeder’s certificate or software copyright.

    Venture Capital Investor /Business angel

    Final Recipient is an early stage SME that has received an investment over last 24 months from a venture capital investor/business angel.

    Risk Finance Investment

    Final Recipient requires a risk finance investment (in view of entering a new product or geographical market) which is ≧  50% of its average annual turnover in preceding 5 years. Condition: Based on the business plan prepared in view of entering new product or geographical market.

    R&I costs at least 10% of total operating costs

    Final Recipient’s R&I costs represent at least 10% of its total operating costs in at least one or three preceding years (or current financial statements if no financial history)

    Small   Mid-Cap and R&I costs at least 10% of total operating costs

    In case the Final Recipient is a small mid-cap and its R&I costs represent at least 10% per year of its total operating costs in the three preceding years or at least 15% in at least one of the three preceding years preceding the Final Recipient’s application for the final recipient transaction.

    R&I costs qualify under EU support measure

    Final Recipient has incurred R&I expenses qualified in the past 36 months by competent national, regional or institutional bodies, as a part of support measures approved by the European Commission designed to incentivise R&I.

    Conditions: Designation shall not be limited to or otherwise in favour of any particular industry, shall reflect one of the innovation criteria with the exception the R&D Prize, the body must be independent of the financial intermediary and final recipient and final recipient transaction covers incremental expenditures as indicated in the business plan

    Designated innovative

    Final Recipient has been designated as an innovative company in the last 36 months from independent national, regional or EU body.

    Conditions:

    (1)    the designation is based on publicly available criteria where these criteria

    1. Are not limited to or favour any field/sector.
    2. Reflect at least one of the innovation criteria (except from the criterion where “Designated Innovative” as noted above)

    (2)    the organisation or institution are independent from the bank and the company (customer).

    (3)    The loan will cover additional costs as provided for in the client’s business plan.

     

    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.

The funding 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.

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