InvestEU: EIF guarantees enable LocalTapiola to provide €32 million in new loans to Finnish SMEs

• The new guarantee agreements aim to address the challenges for local companies in securing financing in the current economic circumstances.
• The agreement was made possible with the support of the InvestEU programme, which aims to trigger over €372 billion in additional investment over the period 2021-2027.

The European Investment Fund (EIF) and Finnish alternative lender LocalTapiola Corporate Lending I GP Ltd have signed two new portfolio guarantee agreements to provide €32 million in new loans to Finnish small businesses and mid-caps. The capped and uncapped EIF guarantees will allow LocalTapiola, a well-known EIF counterpart, to support Finnish companies with improved lending conditions such as reduced interest rates.  The agreement is supported by the InvestEU programme, which aims to trigger more than €372 billion in additional investments over the period 2021-2027.

The agreement between the EIF and LocalTapiola, consists of a capped and an uncapped guarantee, through which LocalTapiola will be able to support a broader spectrum of companies and industries, for example, target riskier SMEs or companies lacking sufficient collateral.

More specifically, under the EIF uncapped guarantee, LocalTapiola will be able to improve companies’ competitiveness by supporting subordinated lending to SMEs negatively affected by the economic downturn, and by facilitating their recapitalisation needs, including by refinancing existing borrowings. Subordinated debt instruments play an important role in SME financing, as they can stabilise their financial position, improve borrowing capacity and support business investments.

“At a time when small businesses in Finland — like their peers across Europe — are facing a multitude of challenges to sustain their activity or to grow, we want to ensure that SMEs are able to meet their financing needs,” says EIF Chief Executive Marjut Falkstedt. “This new cooperation with LocalTapiola, backed by the InvestEU programme, will make financing available for Finnish businesses on more favourable terms, helping them to pursue their professional ambitions.”

“LocalTapiola is very proud to announce its participation in the esteemed InvestEU programme. This collaboration marks another significant milestone in our commitment to providing enhanced financial services to our valued customers after InnovFin and EGF-Guarantee programs. By becoming a part of the InvestEU Program, LocalTapiola is poised to extend its reach in delivering even more competitive and comprehensive financing solutions. This strategic partnership opens up new horizons for us to leverage our expertise in cooperation with all major Finnish banks”, added Matti Kiviniemi, Head of LocalTapiola Corporate Lending.

Background information

LocalTapiola Group is a mutual group of companies owned by its customers. It serves private customers, farmers, entrepreneurs, corporate customers and organisations. LocalTapiola's products and services cover non-life, life and pension insurance, as well as investment and saving services. LocalTapiola is also a professional in corporate risk management and welfare in the workplace. LocalTapiola's vision is to make the lives of Finns more secure and healthy. Lifelong security means comprehensive, proactive services for LocalTapiola's customers and business idea is to safeguard customers' everyday lives and success.

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized enterprises (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for the European Union’s policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together under one roof the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

Press contacts

EIB Group
Kristiina Randmaa, tel.: +352 4379 72894 — k.randmaa@ext.eib.org
Follow us on Twitter@eif_eu
Website: www.eif.org — Press Office: +352 4379 21000 — press@eib.org

LocalTapiola
Matti Kiviniemi, tel.: +358 40 728 8751 — matti.kiviniemi@lahitapiola.fi
Website: www.lahitapiola.fi