The EIB has ramped up its support for SMEs by making up to €30 billion available over the next three years (EurActiv 13/2/09). The funds are currently being dispersed through partnerships between the EIB and commercial banks in member states.
In an interview with EurActiv, Richard Hyslop, EU and international affairs policy advisor at the Federation of Small Businesses, said the money ring-fenced to help ease the impact of the credit crunch had not been flowing to companies which needed it most.
There are several precedents for this, according to Hyslop, who says the EIB has made it clear that "institutions which do not operate within the banking industry can borrow funds". He also highlights the €200 million in loans given to regional bodies in Castilla-La Mancha in Spain as a model for others to follow.
"More needs to be done to ensure the proposed £4 billion EU rescue package for small businesses reaches the sector. The FSB has proposed that regional governments apply for funding from the European Investment Bank (EIB)."
"The One North East RDA [in north-eastern England] is embarking on this, but it should be taken up by the other RDAs," Hyslop said.
He said the crisis had triggered a range of responses across different UK regions, but more needed to be done. The Scottish Government has introduced a business rates relief scheme which exempts small firms, and a similar scheme will kick in next year in Northern Ireland. However, SMEs in England and Wales are not currently benefiting from such relief.
Hyslop said 98% of small firms do not believe the UK government’s efforts to help SMEs by cutting VAT from 17.5% to 15% to have had any impact on their businesses, but added that he was "encouraged" by the greater dialogue between government and the business community.