One of these financing instruments is a bilateral loan, hereafter called EIB financing, that is offered directly to innovative growth companies. So far, these loans have been granted to approximately a dozen Finnish growth companies and several companies are currently in different stages of the loan application process. The financing is offered as a part of the Horizon 2020 – program, which is the EU’s research and innovation financing program.
Pursuant to the loan agreements signed to date, Finnish growth companies have been granted an aggregate of approximately 200 million Euros of EIB financing, individual loans being between 8.5 and 25 million Euros. At the same time, Finnish growth companies have in years 2015-2017 raised approximately 680 million Euros of new capital from venture capital investors and corporate VC’s. It is safe to say that EIB financing has a considerable role as a growth booster for Finnish growth companies.
EIB financing has characteristics of both debt and equity. Its structure also includes some features of venture debt. In parallel, the loan agreements themselves have much in common with traditional project financing. Even if EIB’s financing solution contains just a few new elements, the instrument as a whole is something new at least for Finnish growth companies. In addition, the process of applying for and the documentation relating to EIB financing is relatively burdensome compared to for example early-stage financing rounds.