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July 17, 2024

Boosting innovation at your SME with the InnovFin Guarantee

  Compiled by myLIFE team myCOMPANY February 5, 2018 3979

Innovation can support your business, transform society and change the world. Not only is it a key ingredient in start-up creation, but also for well-established SMEs looking to defend their market share or expand their business. However, good ideas almost always need financial backing to make them a reality, and this is a hurdle many people fail to clear. In order to help transform your innovative ideas into business opportunities, the European Investment Bank (EIB) and the European Investment Fund (EIF) have jointly put in place the InnovFin Guarantee for SMEs. Additional information below.

What is the InnovFin Guarantee?

Job creation, growth, sustainable development, healthcare: these are some of the fields that can only move forward through innovation. Launched in 2014 by the EIB in cooperation with the European Commission, “InnovFin – EU Finance for Innovators” is an initiative that seeks to boost innovation in Europe through a wide range of financing tools such as loans, guarantees and equity-type funding. Its aim is to facilitate and accelerate access to finance for innovative businesses, quickly and under reasonable conditions regardless of the risk inherent to innovation.

Among the tools in place, the InnovFin Guarantee (or InnovFin SME Guarantee) allows financial intermediaries such as Luxembourg banks to support innovative businesses in the Greater Region. Financing granted to eligible SMEs or mid-caps under InnovFin will have up to 50% of their value guaranteed by the EIF. This measure reduces risk for banks, making them more willing to grant financing for your much-needed innovation.

InnovFin’s philosophy is to share some of the risk borne by banks in order to increase lending to innovative companies, which are inherently more risky.

The initiative provides guarantees on financing of between EUR 25,000 and EUR 7.5 million for:

  • tangible and intangible fixed assets;
  • working capital;
  • a business transfer.

Eligibility criteria

To qualify for the InnovFin Guarantee, your company must meet the following primary criteria and at least one of the innovation criteria.


In addition to a transaction amount of between EUR 25,000 and EUR 7.5 million and a term of between 1 and 10 years, your company must be:

  • an SME with fewer than 250 FTE (full-time equivalent) staff and turnover under EUR 50 million or a total balance sheet under EUR 43 million;
  • or a mid-cap with fewer than 499 FTE staff.

To request an InnovFin Guarantee from a Luxembourg bank, your company must be based in Luxembourg or the Greater Region. In this respect, it is important to check with your relationship manager at the bank as to whether your SME or mid-cap is eligible.


The main purpose of the innovation criteria is to ensure that the guarantees awarded are in line with the objectives of the InnovFin initiative. In order to determine this, your business must meet at least one of the following criteria:

  • The company has been operating for less than 12 years and its internal growth in terms of FTE staff or turnover was greater than an average of 20% per year over a three-year period, and it had at least 10 FTE staff at the beginning of the observation period.
  • The company has been operating for less than seven years and its R&I costs represented at least 5% of its operating costs in at least one of the three years preceding the loan application. In the case of a start-up – i.e. a company in its initial stages of operation – without any financial history, the R&I costs must represent at least 5% of the operating costs for the current tax year.
  • The company undertakes to spend at least 80% of the loan amount on R&I as indicated in its business plan. The remainder must be used to cover related costs.
  • The beneficiary has received grants, loans or guarantees from the EU (Horizon 2020, FP7 or Eurostars) or regional or national innovation support schemes over the last 36 months, under the condition that the requested loan is not covering the same expense.
  • The company has been awarded an R&D or Innovation prize by the European Union over the last 24 months.
  • The company has registered at least one patent in the last 24 months and the purpose of taking out the loan is to directly or indirectly develop this patent.
  • The company is an SME and has received an investment over the last 24 months from a venture capital investor or from a business angel; or such venture capital investor or business angel is a shareholder of the company at the time of the loan application.

Since 2014, at least 5,500 companies in 40 countries have received financing under the InnovFin initiative. Why not yours?

Since 2014, at least 5,500 companies in 40 countries have received financing under the InnovFin initiative. Why not yours? Contact Banque Internationale à Luxembourg or other participating banks to find out more about the programme. You can also visit the EIB website directly.

Ready… steady… innovate!