EIF supports Bürgschaftsbank Baden-Württemberg to expand their guarantees for small companies

• Bürgschaftsbank Baden-Württemberg has signed-up for a counter-guarantee from the EIF to support companies in their region.
• The €52.5 million counter-guarantee, made possible by the European Guarantee Fund (EGF), allows the credit institute to support SMEs with guarantees of up to €75 million.
• The EGF support allows small companies to access credit under more favorable terms. 

Bürgschaftsbank Baden-Württemberg (BBW), together with Bürgschaftsbank Nordrhein-Westfalen (BNRW), will increase their guarantee support for regional financial institutions that want to extend financing to small and medium sized companies (SMEs). The EIF will provide a 70% counter-guarantee on a €75 million portfolio of guarantees, dedicated to SMEs active in the German states of Baden-Württemberg and North Rhine-Westphalia. BBW is spearheading the transaction using up to 80% of the counter-guarantee, while BNRW will allocate approximately 20%.

This counter-guarantee is made possible by the European Guarantee Fund (EGF), which aims at facilitating access to credit for European businesses affected by the negative economic impact of the COVID-19 outbreak. The funding comes at a moment when many European SMEs look for support to deal with the economic fallout of the pandemic. By channeling guarantees and counter-guarantees to both traditional and alternative finance providers, the EGF helps to make available new, advantageous lending to German SMEs.

Alain Godard, Chief Executive of the European Investment Fund, commented: “The EGF was set up as an instrument to help businesses affected by the pandemic. It allows banks to lend not only to the affected companies, but also to growing or young businesses, helping them to find their way out of the crisis. We are glad that Bürgschaftsbank Baden-Württemberg and Bürgschaftsbank Nordrhein-Westfalen use this instrument to support smaller businesses in their regions during the pandemic.”

Guy Selbherr, member of the board of Bürgschaftsbank Baden-Württemberg, added: “Competitive enterprises, especially small and medium-sized ones, form the basis for prosperity in our country. Therefore, we strive to enable companies in our regions to have the best possible restart after the pandemic. With EGF-backed financing, businesses can finalize their projects and reposition themselves for the time after the crisis.”

Background information:

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

The European Guarantee Fund (EGF) was set up by the EIB Group with contributions from Germany and other EU Member States to shield companies suffering from the COVID-19 crisis. Using nearly €25 billion in guarantees, the EGF allows the EIB and the EIF to quickly make loans, guarantees, asset-backed securities, equity and other financial instruments available to mostly small and medium-sized enterprises. The EGF is part of the European Union’s recovery package aiming to provide a total of €540 billion to boost those parts of the EU economy that have been hit the worst.

The Bürgschaftsbank Baden-Württemberg (BBW) was founded by business for business. Its shareholders are chambers, associations and leading institutions of the banking industry. Its guarantees for home loans and development bank loans enable small and medium-sized enterprises in the state of Baden-Württemberg to obtain financing when collateral is lacking. A total of 14,789 guarantees exist for companies in Baden-Württemberg with a loan and investment volume of around 2.9 billion euros. Compared to the rest of Germany, BBW is the largest institution of this kind, with more than one third of the loans and guaranteed participations nationwide.

Press Contacts:

Donata Riedel, d.riedel@eib.org, Tel.: +49 30 590047 912, Mobile: +49 151 1465 9021
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Dunja Geisler, dunja.geisler@buergschaftsbank.de, Tel.: +49 711 1645-703, www.bw.ermoeglicher.de