The COSME financial instruments: funding opportunities for European SMEs

The COSME financial instruments: funding opportunities for European SMEs

Over the last few years, the European Union has increasingly focused on businesses, in particular on SMEs. In June 2008, the European Commission adopted the “Small Business Act” in order to promote entrepreneurship and to foster the economic and employment growth of SMEs. SMEs are also mentioned in six of the seven “Europe 2020 Strategy” Flagship Initiatives’ for smart, sustainable and inclusive growth. Access to finance, which is vital for SMEs expansion, growth and innovation (both on the EU internal market and at global level), proves to be often difficult.

In the context of the Multiannual Financial Framework for 2014-2020, the European Union has established the Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME) with the aim of strengthening the competitiveness of the European enterprises, particularly SMEs, and encouraging a European entrepreneurial culture.

The COSME Programme has a financial envelope of 2,3 billion €, of which 1,4 billion (60% of total budget) allocated to the specific objective “to improve access to finance for SMEs in the form of equity and debt”. Therefore, two financial instruments have been set up under the COSME Programme:

  • The “Equity Facility for Growth (EFG)” provides venture capital (including funds-of-funds) and mezzanine finance to SMEs at expansion and growth stage, in particular those operating across borders. Investments are long-term, from 5 to 15 years; in any event, the lifetime of investments shall not exceed 20 years.


Applicants (e.g. banks, credit institutions, financial institutions) who wish to qualify as intermediaries may apply until 30 September 2020. The total amount which can be allocated under both instruments for the year 2018 is 191,4 million €.

SMEs may benefit from COSME financial instruments via the financial intermediaries which have been selected at the EU level after a due diligence process. The full list of financial intermediaries is available on the website of the European Investment Fund, EIF ( – the Fund responsible for the management of the COSME financial instruments and other EU Programmes (e.g. Horizon 2020) – and on the EU portal for access to finance (

In order to ensure greater effectiveness, both the EFG and the LGF are linked to the equity and guarantee instruments under Horizon 2020 (InnovFin Equity and InnovFin SME Guarantee Facility). The "Loan Guarantee Facility" also contributes to the "SME Initiative", a joint instrument that allows EU Member States to allocate Structural Funds to programs managed directly by the European Commission (e.g. COSME and Horizon 2020) and to the resources of the European Investment Bank Group (EIB). The Initiative is operational in Bulgaria, Finland, Malta, Romania, Spain and Italy (since October 2016).

Support for Businesses, Small and medium enterprises, Research and innovation