Vilnius-based SME Finance, a company reinventing financing for SMEs, announced on Monday that it has signed a strategic partnership with the European Investment Fund (EIF).

This collaboration, operating under the EU’s “InvestEU” programme, aims to provide enhanced lending opportunities to small and medium-sized enterprises (SMEs) in the Netherlands, the Baltic states, and Finland.

Around €40M in financing will be made available for SMEs in these countries.

Capital utilisation

SME Finance, with an EIF partnership, will provide loans to targeted businesses backed by up to 80 per cent loan guarantees. These funds will aid business growth through innovation, sustainability, and digitisation projects. 

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Additionally, micro financing up to €50,000 will be offered for very small enterprises with 10 employees and yearly revenues not higher than €2M. The goal is to support diverse businesses and foster development.

Marjut Falkstedt, EIF’s Chief Executive, says, “We fully align ourselves with SME Finance’s motto of “empowering growth” for small businesses looking to invest in innovation, digitalisation and sustainability. These are key priorities of InvestEU and in achieving them, we are delighted to support agile online and alternative lenders that help diversify SME finance sources.”

“Financing where we could not before…”

The EIF is addressing SMEs’ finance access issue as demand for alternative loans, especially under €1.5M, rises. In 2022, 55,000 SMEs obtained credit from alternative lenders, a 25 per cent increase from 2021, as banks prioritise larger credits. This emphasises the need for innovative financing solutions for small businesses.

Bas Vanhorick, CEO of SME Finance Netherlands, adds, “This agreement with the EIF means that SME Finance can offer companies financing where we could not before or on significantly better terms. Our flexible and efficient financing solutions already cover investment projects and working capital. Now we offer even better terms and lower or even no collateral requirements at all.”

Vanhorick comes from a family of entrepreneurs and entered the financial sector after university. He held positions in Corporate and SME Banking at Fortis/ABN Amro and ING, in the Netherlands, Belgium and France. 

He pioneered an online lending platform at ING’s SME business in France. In 2018, he joined fintech lender October, co-founding their Dutch platform and becoming a board member. Vanhorick is now CEO/Country Head at SME Finance in the Netherlands.

Brief about SME Finance

Founded in 2016, SME Finance is developing an AI-powered fintech platform for rapid lending decisions. This technology enables them to offer optimal financing options to SMEs in the Baltic countries and the broader EU area.

The platform provides rapid, unbiased lending decisions within an hour. Its financial service ecosystem, including the SmeGo platform and mobile app, aims to empower and support entrepreneurs across Europe. 

To date, the company has supplied over €1.4B in working capital to over 3000 expanding businesses throughout Europe.

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