GUIDE ON ACCESS TO FINANCE FOR SMEs

SMEs

The most important pillar for EUs

future economic health

The contents of this document have been selected at the discretion of BANCO SANTANDER, S.A., and it is not the goal of this entity to conduct a thorough review of the content in it, nor to present a complete review of them, therefore leaving no chance of claims against BANCO SANTANDER, S.A. or liability arising from the use that anyone can make of the provided information.

1

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 2

Table of Contents

I. Introduction .................................................................................................................... 3

II. Main Funding Opportunities available to European SME’s .............................................. 5

1. Market information . .................................................................................................... 5

2. Environment ................................................................................................................. 7

3. Energy efficiency, renewable energy ............................................................................ 9

4. Innovation, new markets, new technologies, general research ................................... 10

5. Nuclear energy ........................................................................................................... 15

6. Coal and steel ............................................................................................................. 16

7. Cooperation, collaboration ......................................................................................... 16

8. Starting up and growing phase (all economic sectors). ............................................... 17

9. All economic sectors: European investment bank loans .............................................. 20

III. Internationalisation of SMEs ....................................................................................... 21

IV. Contracts and grants ................................................................................................... 21

V. ANNEX I ......................................................................................................................... 23

VI. ANNEX II ..................................................................................................................... 25

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 3

I. Introduction

The 23 million SMEs in the EU represent 99% of businesses, and are a key driver for economic growth,

innovation, employment and social integration. The European Commission aims to promote successful

entrepreneurship and improve the business environment for SMEs, to allow them to realise their full

potential in today's global economy.

This guides aims to constitute an easy way to navigate through all the EU initiatives and actions to

improve SME’s access to finance.

A description of all initiatives and programs is provided as well a direct link to the main official websites

where you will be able to increase your knowledge on each specific program.

The EU, concerned about the decisive role SMEs play in the European economy has developed different

initiatives to promote their access to funding and their internationalization.

In order to facilitate the comprehension of all the measures and opportunities, the information has been

organized as follows:

- Funding opportunities by areas: market information; environment; energy efficiency and

renewable energy; innovation, new markets, new technologies and general research;

nuclear energy; coal and steel; cooperation; starting up and growing phase

- SMEs Internationalization programs

- Contracts and grants

Main EU programmes for SMEs PROGRAMME BUDGET1

Market information

Enterprise Europe Network (EEN)

Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME)

€2.5bn (2014-2020)

Environment

LIFE + Environmental Programme

€3.2 bn (2014-2020) Energy efficiency, renewable energy

The Intelligent Energy Europe Programme (IEE)

€730 million (2014-2020)

Innovation, new markets, new technologies, general research

The Information Communication Technologies Policy Support

1 On September 18th, the European Commission proposed adjustments to its proposal for the 2014 EU budget increasing the funding possibilities for several programmes in 2014 –by €30 million for COSME and by €200 million for Horizon 2020 (programme for research and innovation). http://europa.eu/rapid/press-release_IP-13-840_en.htm

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 4

Programme (ICT-PSP)

The Entrepreneurship and Innovation Programme (EIP)

Ideas - Basic research at the frontiers of science

People - Training and career development of researchers

Capacities - Helping develop the capacities that Europe needs to be a thriving knowledge-based economy

KICs (Knowledge and Innovative Communities)

European Regional Development Fund (ERDF)

European Social Fund (ESF)

€1.3bn (2014-2020)

€1bn (2014-2020)

€7.5bn (2014-2020)

€4.75 bn (2014-2020)

€4,1 bn (2014-2020)

€135 million (2014-2020)

Nuclear energy

Euratom programme (2014-2018)

€1.7 bn (2014-2018) Coal and steel

Research Fund for Coal and Steel (RFCS)

€55 million (per year) Cooperation and collaboration

Cooperation Programme

€33 bn (2007-2013*) Starting up and growing phase

EIP (See Innovation, new markets, new technologies, general research)

Joint European Resources for Micro and Medium Enterprises (JEREMIE)

Joint Action to Support Micro-finance Institutions in Europe (JASMINE)

Future Internet Public-Private Partnership (FI-PPP): Third phase

Microfinance

EU-backed loans for small businesses

Equity capital

Guarantees

€100 million (2014-2015)

All sectors – European Investment Bank loans

Finance for SMEs and midcaps companies

€13 bn (2011*)

Internationalisation of SMEs

Your Europe, your opportunity

EU Gateway Programme – Japan and Japan

Business outside the EU

- Accessing non-EU markets - Candidate countries - Mediterranean and Eastern Neighbour countries - Asia - South America

Contracts and grants

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 5

II. Main Funding Opportunities available to European SMEs

The European Union provides support to European SMEs. This is available in different forms such as grants, loans and, in some cases, guarantees. Support is available either directly or through programmes managed at national or regional level. SMEs can also benefit from a series of non-financial assistance measures in the form of programmes and business support services. Along this document we will take a look at the more relevant financing sources sorted by area:

1. Market information (overcoming legal obstacles, identifying potential business

partners across Europe and more).

Enterprise Europe Network. (EEN).

http://een.ec.europa.eu/

The EEN comprises about 600 partners in 49 helping to increase the competitiveness of EU businesses. It provides a wide

range of services to SMEs and entrepreneurs, among others, helping them to access market information, overcome legal

obstacles and identify potential business partners across Europe, including innovation support and transnational

technology transfer services.

The EEN helps enterprises in these areas:

Develop your business in new markets Source or license new technologies Access EU finance and EU funding

Background:

The EEN makes part of the Entrepreneurship and Innovation Programme (EIP), which is part of the Competitiveness and

Innovation framework Programme (CIP) (2007-2013). For the period 2014-2020 the CIP will work under the Programme

for the Competitiveness of Enterprises and SMEs (COSME) and the EEN will continue working.

What is the CIP?

Created by the EU and with SMEs as its main target, the CIP supports innovation activities, provides better access to

finance and delivers business support services in the regions.

The CIP provides support for innovation through a series of initiatives and actions aimed at providing financial support to

innovators, innovation support services for SMEs, developing and testing new forms of business support and by

facilitating transnational benchmarking and cooperation with a view to mobilising more resources for innovation and to

adopting best practices in innovation policy-making.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 6

It encourages a better take-up and use of information and communication technologies (ICT) and helps to develop the

information society. It also promotes the increased use of renewable energies and energy efficiency.

http://ec.europa.eu/cip/cosme/index_en.htm

CIP is divided in three programmes:

The Entrepreneurship and Innovation Programme (EIP).

- Access to finance:

- Equity Financing.

- Guarantees.

- Support for innovation policy.

- Eco – innovation and market replication.

- Support for SME policy-making through contracts and grants.

- ENTREPRISE EUROPEAN NETWORK (EEN)

CIP The Information Communication Technologies Policy Support Programme (ICT-PSP

- Stimulate new converging markets for electronic networks and services

- Supports the modernisation of public sector services

The Intelligent Energy Europe Programme (IEE)

- Increase the uptake and demand for energy efficiency

- Promote renewable energy sources and energy diversification

- stimulate the diversification of fuels and energy efficiency in transport

What is the COSME?

It is the future of the current CIP. The new Programme for the Competitiveness of Enterprises and Small and Medium-

sized Enterprises (COSME) will run from 2014 to 2020, with a planned budget of €2.5bn.

Objectives

facilitating access to finance for Small and Medium-sized Enterprises (SMEs)

creating an environment favourable to business creation and growth

encouraging an entrepreneurial culture in Europe

increasing the sustainable competitiveness of EU companies

helping small businesses operate outside their home countries and improving their access to markets

COSME will:

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 7

Ensure continuity with initiatives and actions already undertaken under the Entrepreneurship and Innovation

Programme (EIP), such as the Enterprise Europe Network, building on results and lessons learnt.

Continue the many successful features of the EIP, while simplifying management of the programme to make it

easier for entrepreneurs and small businesses to benefit.

Support, complement and help coordinate actions by EU member countries. COSME will specifically tackle

transnational issues that – thanks to economies of scale and the demonstration effect – can be more effectively

addressed at European level.

Expected results

Easier access to finance for entrepreneurs and small businesses.

More prominent role for self-employment and business development as important sources of growth and job

creation

In individual EU countries: a more competitive industry, more entrepreneurs and higher employment rates.

Main beneficiaries

Existing entrepreneurs (small businesses in particular) – easier access to funding for development,

consolidation and growth of their business.

Future entrepreneurs (including young people) – assistance in setting up their own business.

National, regional and local authorities – tools for effectively reforming policy: reliable, EU wide data and

statistics, best practice and financial support to test and scale up sustainable solutions for improving global

competitiveness.

COSME is expected to contribute to an annual increase of €1.1bn in the EU's GDP.

The Enterprise Europe Network is expected to assist 40,000 companies with partnership agreements, resulting in:

1,200 new business products, services or processes annually

€400mn annually in additional turnover for assisted companies.

Access to finance will be easier for entrepreneurs, in particular those willing to launch cross-border activities, resulting in

an expected annual increase of €3.5bn in additional lending and/or investment for EU companies.

2. Environment

LIFE + Environmental Programme

http://ec.europa.eu/environment/life/funding/lifeplus.htm

The LIFE programme is the EU’s funding instrument for the environment. The general objective of LIFE is to contribute to

the implementation, updating and development of EU environmental policy and legislation by co-financing pilot or

demonstration projects with European added value.

Budget 2007-2013: €2.143 billion

Budget 2014 -2020: € 3.2 billion

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 8

Background:

LIFE began in 1992 and to date there have been three complete phases of the programme. During this period, LIFE has

co-financed some 3104 projects across the EU, contributing approximately €2.2 billion to the protection of the

environment.

LIFE+ is divided in three main parts:

LIFE+ Nature & Biodiversity: It will co-finance best practice or demonstration projects that contribute to the

implementation of the Birds and Habitats Directives and the Natura 2000 network. In addition, it will co-finance

innovative or demonstration projects that contribute to the implementation of the objectives of Commission

Communication on "Halting the loss of biodiversity by 2010 – and beyond". At least 50percent of the LIFE+

budget for project co-financing must be dedicated to LIFE+ Nature and Biodiversity projects.

LIFE+ Environment Policy & Governance: It will co-finance innovative or pilot projects that contribute to the

implementation of European environmental policy and the development of innovative policy ideas,

technologies, methods and instruments. It will also help monitor pressures (including the long-term monitoring

of forests and environmental interactions) on our environment.

LIFE+ Information & Communication: This new component will co-finance projects relating to communication

and awareness raising campaigns on environmental, nature protection or biodiversity conservation issues, as

well as projects related to forest fire prevention (awareness raising, special training).

Eligibility criteria

Projects financed by LIFE+ must satisfy the following criteria:

Projects must be of EU interest, making a significant contribution to the achievement of the general objective of

LIFE+.

They must be technically and financially coherent and feasible and provide value for money.

Where possible, projects financed by LIFE+ should promote synergies between different priorities under the 6th

Environmental Action Programme, and integration.

Projects should satisfy at least one of the following criteria:

Best-practice or demonstration projects, for the implementation of the Birds and Habitats Directives.

Innovative or demonstration projects, relating to EU environmental objectives, including the development or

dissemination of best practice techniques, know-how or technologies.

Awareness-raising campaigns and special training for agents involved in forest fire prevention.

Projects for the development and implementation of EU objectives relating to the broad-based, harmonised,

comprehensive and long-term monitoring of forests and environmental interactions.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 9

Potential beneficiaries

LIFE+ is open to public or private bodies, actors or institutions registered in the European Union. Project proposals can

either be submitted by a single beneficiary or by a partnership which includes a coordinating beneficiary and one or

several associated beneficiaries. They can be either national or transnational, but the actions must exclusively take place

within the territory of the 27 Member States of the European Union.

Project selection

The project proposals received from the national LIFE+ authorities are registered by the Commission and an

acknowledgement of receipt is transmitted to the coordinating beneficiary. The LIFE Unit of the Environment Directorate

General is responsible for the evaluation procedure. It will verify the admissibility, exclusion and eligibility, the selection

and the award criteria and propose to the LIFE+ Committee a list of project proposals for co-financing, according to the

criteria outlined in the "Guide for the evaluation of LIFE+ project proposals” (which is published each year with the call).

LIFE + (2014-2020)

The Commission proposes to allocate EUR 3.2 billion over 2014-2020 to a new Programme for the Environment and

Climate Action - LIFE. The proposed new programme will build on the success of the existing LIFE+ Programme but will

be reformed to have a greater impact, be simpler and more flexible and have a significantly increased budget.

New aspects of the future LIFE Programme include:

Creation of a new sub-programme for Climate Action;

Clearer definition of priorities with multi-annual work programmes adopted in consultation with the Member

States.

New possibilities to implement programmes on a larger scale through "Integrated projects" which can help

mobilise other EU, national and private funds for environmental or climate objectives.

3. Energy efficiency, renewable energy

The Intelligent Energy Europe Programme (IEE) to which approximately €727 million has been allocated.

http://ec.europa.eu/cip/iee/index_en.htm

The Intelligent Energy-Europe Programme includes actions to increase the uptake and demand for energy efficiency, to

promote renewable energy sources and energy diversification, and to stimulate the diversification of fuels and energy

efficiency in transport.

Background:

This programme is part of the COMPETITIVENESS AND INNOVATION FRAMEWORK PROGRAMME (CIP) (2007-2013).

[General information about the CIP on page 2]

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 10

4. Innovation, new markets, new technologies, general research (health, energy,

transport…)

The Information Communication Technologies Policy Support Programme (ICT-PSP) to which approximately €1,3

has been allocated.

http://ec.europa.eu/cip/ict-psp/index_en.htm

It aims to stimulate the new converging markets for electronic networks and services, media content and digital

technologies. It also supports the modernisation of public sector services that will raise productivity and improve

services.

Background:

The ICT programme is one of the three programmes under the Competitiveness and Innovation framework Programme

(CIP) (2007-2013) and it will continue under the COSME (2014-2020).

The Entrepreneurship and Innovation Programme (EIP). The Entrepreneurship and Innovation Programme seeks

to support innovation and SMEs in the EU. It counts with a budget of over 1 € bn.

http://ec.europa.eu/cip/eip/index_en.htm

Access to finance

The Competitiveness and Innovation Framework Programme (CIP) has several schemes and a budget of over €1bn to

facilitate access to loans and equity finance for SMEs where market gaps have been identified.

The CIP financial instruments are implemented for the Commission by the European Investment Fund (EIF) on a trust basis. They cover different needs depending on the stage of development of the small business.

o Equity Financing: The High Growth and Innovative SME Facility (GIF). It provides:

Risk capital for innovative SMEs in their early stages (GIF1): EIF can usually invest 10 to 25% of the total equity of the intermediary venture capital fund or up to 50% in specific cases;

Risk capital for SMEs with high growth potential in their expansion phase (GIF2): EIF can invest 7.5 to 15% of the total equity of the intermediary venture capital fund or, exceptionally, up to 50%.

o Guarantees: The SME guarantee facility (SMEG). Working with the EIF it provides loan guarantees to

encourage banks to make more debt finance available to SMEs. SMEs wishing to apply for guaranteed financing should contact one of the financial intermediaries that have signed an agreement with the EIF.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 11

Support for improving innovation policy: Supports transnational networking of different actors in the

innovation process and innovative companies, including benchmarking initiatives and the exchange of

best practice.

Eco-innovation pilot and market replication .

Support for innovation and SME policy-making through contracts and grants.

Background:

The EIP programme is one of the three programmes under the Competitiveness and Innovation framework Programme

(CIP) (2007-2013) and it will continue under the COSME (2014-2020).

The European Investment Fund (EIF) aims to provider risk finance to benefit small and medium-sized enterprises (SME)

risk finance across Europe. It is part of the EIB Group, the European Commission and a wide range of public and a wide

range of public and private banks and financial institutions. EIF carries out its activities using either its own funds or

those provided by the European Investment Bank, the European Commission, by EU Member States or other third

parties. By developing and offering targeted financial products to its intermediaries, such as banks, guarantee and

leasing companies, micro-credit providers and private equity funds, the EIF enhance SMEs access to finance.

By taking SME risk, the EIF has two objectives

Fostering EU objectives, notably in the field of entrepreneurship, growth, innovation, research and

development, employment and regional development.

Generating an appropriate return for our shareholders, through a commercial pricing policy and a balance of

fee and risk based income.

Ideas - Basic research at the frontiers of science

http://ec.europa.eu/research/fp7/index_en.cfm?pg=ideas

Implemented by the European Research Council, this programme counts with a budget of €7 510 million from 2007 to

2013.

The ideas programme will boost Europe's competitiveness by helping to attract and retain the most talented scientists,

supporting risk-taking and high-impact research, and promoting world-class scientific research in new, fast emerging

fields.

Background:

The Ideas Programme makes part of the Framework Programmes for Research and Technical Development (FP).

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 12

What is FP?

'Framework programmes' (FPs) have been the main financial tools through which the European Union supports research

and development activities covering almost all scientific disciplines.

The current FP is FP 7, which runs from 2007 to 2013 with a whole budget of 50 € billion. It successor will run from 2014

to 2020 under the name of HORIZON 2020

What is HORIZON 2020?

EU FRAMEWORK PROGRAMME FOR RESEARCH AND INNOVATION (2014-2020)

http://ec.europa.eu/research/horizon2020/index_en.cfm

Horizon 2020 is one of the core parts of Europe the Multiannual Financial Framework 2014-2020. This programme

proposed by the Commission is the financial instrument implementing the innovation Union, a Europe 2020 flagship

initiative aimed at securing Europe's global competitiveness.

Running from 2014 to 2020 with an €80 billion budget, the EU’s new programme for research and innovation is part of

the drive to create new growth and jobs in Europe.

Horizon 2020 and COSME are complementary programmes to generate growth and jobs. They have different focuses

but are closely coordinated. Horizon 2020 focuses on innovation driven growth while COSME focuses on supporting to

create favourable business environment and competitiveness

Horizon 2020 will combine all research and innovation funding currently provided through these 3 programmes:

1. The Framework Programmes for Research and Technical Development (FP)

2. The innovation related activities of the Competitiveness and Innovation Framework Programme (CIP)

3. The European Institute of Innovation and Technology (EIT6).

The proposed support for research and innovation under Horizon 2020 will:

Strengthen the EU’s position in science with a dedicated budget of € 24 598 million. This will provide a boost

to top-level research in Europe, including an increase in funding of 77% for the very successful European

Research Council (ERC7).

Strengthen industrial leadership in innovation € 17 938 million.

Provide € 31 748 million to help address major concerns such as climate change, developing sustainable

transport and mobility, making renewable energy more affordable, ensuring food safety and security, or

coping with the challenge of an ageing population.

People - Training and career development of researchers

http://ec.europa.eu/research/fp7/index_en.cfm?pg=people

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 13

This programme counts with a budget of €4 750 million. It will support the on-going training, research and mobility of

highly qualified scientists within Europe and the rest of the world. This will encourage the proliferation of centres of

excellence in the EU and their contribution in new areas of research and technology.

Capacities - Helping develop the capacities that Europe needs to be a thriving knowledge-based economy.

http://ec.europa.eu/research/fp7/index_en.cfm?pg=capacities

This programme counts with a budget of €4 097. The Capacities programme aims to optimise the use and development

of research infrastructures, while enhancing the innovative capacities of SMEs to benefit from research.

The programme contains six specific areas i.e: Research Infrastructures, Research for the benefit of SMEs, Regions of

Knowledge, Research Potential, Science in Society and International Cooperation activities.

The EU Member States have earmarked a total of € 1336 million for funding SME research support over the duration of

FP7.

Capacities will operate in seven broad areas:

Research infrastructures

Research for the benefit of small and medium sized enterprises (SMEs)

Regions of knowledge

Research potential

Science in society

Support for the coherent development of research policies

Activities of international co-operation

KICs (Knowledge and Innovative Communities)

A KIC is a highly integrated, creative and excellence-driven partnership which brings together the fields of education,

technology, research, business and entrepreneurship, in order to produce new innovations and new innovation models

that inspire others to emulate it.

They are to become key drivers of sustainable economic growth and competitiveness across Europe through world-

leading innovation. The KICs will be driving effective “translation” between partners in ideas, technology, culture, and

business models, and will create new business for existing industry and for new endeavours.

KICs must address a long-term horizon of 7 to 15 years, but with short-, mid- and long terms objectives that follow the

mission of the KIC.

Budget Climate KIC: 44,3 Million €

Budget EIT IC KIC: 44,13 million €

Budget KIC Inno Energy: 43,4 Million €

KICs are part of the The European Institute of Innovation and Technology (EIT), which have several programmes running

for 2014-2020 with a financial contribution of 2.8 billion (3,18 billion € taking into account estimated inflation).

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 14

http://www.7rp.sk/fileadmin/user_upload/fp7connections2012/prezentacie/Gudrun_Maass.pdf

http://eit.europa.eu/kics/

EUROPEAN REGIONAL DEVELOPMENT FUND (ERDF) 2014-2020

http://ec.europa.eu/regional_policy/thefunds/regional/index_en.cfm

http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2014/proposals/summaries/erdf/erdf_su

mmary_en.pdf

The ERDF is the largest Community financial instrument benefiting SMEs.

It aims to redress the main regional imbalances by supporting the development and structural adjustment in regional

economies.

The ERDF is part of the EU’s cohesion policy, which remains an essential element in the EU’s financial framework for

2014-2020 proposed by the commission.

In order to strengthen the creation and competitiveness of SMEs, the ERDF co-finances activities in a broad range of

areas:

Entrepreneurship, innovation and competitiveness of SME (for example entrepreneurial mentoring,

innovative technologies and management systems in SMEs, eco-innovation, better use of ICT).

Improving the regional and local environment for SMEs (for example access to capital for SMEs in the start-

up and growth phase, business infrastructure and support services for SMEs, regional and local RTD and

innovation capacities, business co-operation and innovation capacities).

Interregional and cross-border co-operation of SMEs.

Investment in human resources (along with funding from the European Social Fund). Unlike many other EU

funding sources, ERDF programmes are not directly managed by the Commission but by national and

regional authorities. These are also contact points for funding applications and project selection

Background:

What is a structural fund?

Structural Funds are designed to help reduce disparities in the development of regions, and to promote economic and

social cohesion within the European Union. The European Commission therefore co-finances regional projects in the

Member States.

Nevertheless, direct aid to SMEs to co-finance their investments is only possible in the economically less developed

regions (the co-called “convergence” regions).

In other regions, priority has been given to actions having a high leverage effect (e.g. entrepreneurship training, support

services, etc.), as opposed to direct aid to individual SMEs.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 15

The Structural Funds (European Regional Development Fund [ERDF] and European Social Fund [ESF]) are the largest Community funding instruments benefiting SMEs. The decentralised management of Structural Funds implies that they are available through the Members States and regions and do not fund projects directly from Brussels. Funds are administered at national/or at regional level. Applications should therefore not be sent to the European Commission but to the ERDF or ESF managing authority in your region or country. Another crucial aspect of Cohesion Policy funding is the fact that EU financial support always runs alongside national public or private financing. The level of EU intervention is linked with the situation on the ground. Depending on a number of socio-economic factors, the co-financing vary between 50% and 85% of the total cost of interventions.

EUROPEAN SOCIAL FUND (ESF) 2014-2020

http://ec.europa.eu/esf/

http://ec.europa.eu/regional_policy/sources/docoffic/official/regulation/pdf/2014/proposals/summaries/esf/esf_summ

ary_en.pdf

The European Social Fund provides support for anticipating and managing economic and social change, with a number of opportunities for supporting SMEs. In the new programming period 2014-2020 the ESF will be targeted on four thematic objectives, the first three being directly linked with SME and entrepreneurship policies:

Promoting employment and supporting labour mobility.

Promoting social inclusion and combating poverty.

Investing in education, skills and life-long learning.

Enhancing institutional capacity and efficient public administration.

Businesses, non-profit organisations and public authorities will receive support to help them adapt to technological change, shift towards a low-carbon economy, keep up with global competition and implement reforms.

5. Nuclear energy

EURATOM PROGRAMME (2014-2018)

http://ec.europa.eu/research/fp7/index_en.cfm?pg=euratom

This programme focuses on research in the nuclear energy sector.

For the 2014-2020 period the budget is 1665 Million€.

Indirect actions 1009 Million €

o This includes:

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 16

Fusion research and development

Nuclear fission, safety and radiation protection

Direct actions of the Joint Research Centre 656 Million €

6. Coal and steel

RESEARCH FUND FOR COAL AND STEEL (RFCS)

Every year around € 55 million is made available to universities, research centres and private companies to fund projects. This programme focuses on research projects in coal and steel sectors.

7. Cooperation, collaboration

Cooperation - Fostering collaboration among research entities from academia and industry and research

institutes to gain leadership in key technology areas.

http://ec.europa.eu/research/fp7/index_en.cfm?pg=coordination

This programme works under FP7 for the period 2007-2013 and Horizon 2020 for the period 2014-2020. From 2007 to

2013 FP7 allocates EUR 32 413 million to the Cooperation programme. The budget will be devoted to supporting

cooperation between universities, industry, research centres and public authorities throughout the EU and beyond.

The specific programme on 'Cooperation' supports all types of research activities carried out by different research

bodies in trans-national cooperation and aims to gain or consolidate leadership in key scientific and technology areas.

The Cooperation programme is sub-divided into ten distinct themes. Each theme is operationally autonomous but aims

to maintain coherence within the Cooperation Programme and allowing for joint activities cutting across different

themes.

The ten identified themes reflect the most important fields of knowledge and technology where research excellence is

particularly important to improve Europe’s ability to address its social, economic, public health, environmental and

industrial challenges of the future. Their continued relevance will be guaranteed by relying on a number of sources from

the research sector, including the European Technology Platforms (ETP). Important themes identified in the Strategic

Research Agendas (SRAs) developed by the ETPs are therefore covered by the Cooperation programme.

Across all these themes, support to trans-national cooperation will be implemented through.

Collaborative research: European Excellence

Coordination between national research programmes

Joint Technology Initiatives

Technology Platforms

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 17

8. Starting up and growing phase (all economic sectors).

The Entrepreneurship and Innovation Programme (EIP). The Entrepreneurship and Innovation Programme seeks

to support innovation and SMEs in the EU. It counts with a budget of over 1 € bn.

http://ec.europa.eu/cip/eip/index_en.htm

Access to finance

The Competitiveness and Innovation Framework Programme (CIP) has several schemes and a budget of over €1bn to

facilitate access to loans and equity finance for SMEs where market gaps have been identified.

The CIP financial instruments are implemented for the Commission by the European Investment Fund (EIF) on a trust basis. They cover different needs depending on the stage of development of the small business. (See pag.7)

Joint European Resources for Micro and Medium Enterprises (JEREMIE) JEREMIE is a joint initiative of the European Commission and the European Investment Fund with the European Investment Bank. It aims to improve access to finance for micro to medium sized enterprises and in particular the supply of micro-credit, venture capital finance or guarantees and other forms of innovative financing. Special emphasis is given to supporting start-ups, technology transfer, technology and innovation funds and micro-credit. JEREMIE is managed as an integral part of the European Regional Development Fund, and projects are selected at the relevant national and regional level. http://eif.europa.eu/jeremie/ http://ec.europa.eu/regional_policy/funds/2007/jjj/jeremie_en.htm To access financing, locate national/regional managing authorities who can inform you about how to obtain financing in your country or region via the JEREMIE facility: http://ec.europa.eu/regional_policy/manage/authority/authority_en.cfm

Joint Action to Support Micro-finance Institutions in Europe – JASMINE JASMINE is a joint initiative of the European Commission and the European Investment Fund together with the European Investment Bank, and complements the JEREMIE initiative. It aims to develop the supply of micro-credit in Europe by means of two main actions: by providing technical assistance to micro-finance institutions in order to help them to be credible financial intermediaries and to obtain capital more easily; and by financing the activities of non-bank financial institutions to enable them to make a higher number of loans. The aim of the programme is to improve the access to finance of small businesses, unemployed people, or people not currently in employment who would like to become self-employed but who are unable to access traditional banking services.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 18

This programme was launched in 2008 with a three-year pilot phase, with an initial capital of €50 million. http://ec.europa.eu/regional_policy/funds/2007/jjj/micro_en.htm http://www.eif.org/what_we_do/microfinance/JASMINE/index.htm

Future Internet Public-Private Partnership (FI-PPP): Third phase. The Future Internet Public-Private Partnership is a program set up by the European Commission and European industry

to make the business operations on several domains smarter, and to increase competitiveness of European technology

providers. The 5-year program is implemented via 3 phases. The third phase, which starts now, counts with a capital of

€100m euros

The objective of the third phase of the FI-PPP is to provide and run a stable infrastructure for the large scale trials and expand the Generic Enablers, and to involve through open calls SMEs and web entrepreneurs as developers of innovative, data-rich services and applications, building on Use Case platforms and the Generic Enablers. Here we focus only on the second objective.

How does phase 3 work?

This objective calls for projects with participants that can rapidly connect to existing communities of small and innovative ICT developers, i.e., SMEs and Web entrepreneurs, to take-up Future Internet technologies developed in previous phases.

Typically projects will bring together partners providing the full ecosystem to successfully involve the SMEs and Web entrepreneurs called to participate.

Project participants will have to demonstrate their financial viability to receive and manage funds at the level requested, as well as their expertise and capacity in developing and managing the full life-cycle of the open-calls transparently.

The main task of the projects is to scope, organise and manage open calls for small and innovative ICT players such as SMEs and Web entrepreneurs to develop services/applications that present a clear societal and economic value while exceeding a defined minimum level of functional complexity.

At least 80% of the project budget should be reserved for open calls for SMEs and web-entrepreneurs. Projects must publish widely their open calls and adhere to FP7 standards with respect to evaluation, conflict of interest and confidentially. Projects must also promote widely the participation in their open calls. SMEs and Web entrepreneurs that are successful in the open calls will be granted financial assistance which is typically in the order of EUR 50.000-150.000.

To learn more about the Future Internet Public-Private Partnership (FI-PPP), please check this website: http://cordis.europa.eu/fp7/ict/netinnovation/call3short_en.html

Microfinance The EU supports individuals facing uncertainty in the job market who wish to set up their own micro-enterprise or opt

for self-employment through the European Progress Microfinance Facility.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 19

Microfinance is able for entrepreneurs or a micro-enterprise with up to 10 employees that are looking for a micro-loan

below € 25.000.

The European Investment Fund [General information on page 8] does not provide direct financing to entrepreneurs. It indirectly

supports SMEs by working with a wide range of financial intermediaries (banks, guarantee, microfinance institutions,

private equity and venture capital funds, etc) that provide a wide range of financial products to SMEs

The financial intermediary will inform the entrepreneur about specific application requirements and procedures, varying accordingly to each local market. You can benefit from more than one micro-credit under the initiative.

EU-backed loans for small businesses The European Union (EU) supports financing for SMEs to help their business startup or develop through the EU Competitiveness and Innovation Framework Programme (CIP Programme 2007-2013). List of EIF financial intermediaries providing loans and venture capital to SMEs: http://www.accesstofinance.eu

Equity capital If a SME wish to apply for an equity investment it should submit its investment proposal and business plan directly to the private equity and venture capital funds that have signed an agreement with the EIF. These funds make investment decisions based on normal commercial criteria. List of these intermediaries split by country: http://www.eif.org/what_we_do/where/index.htm VENTURE CAPITAL IN EU LATEST DEVELOPMENTS

There are currently several initiatives being negotiated at EU level that seek increase access to finance by SMEs:

European Venture Capital Funds Regulation (EVCFR)

The EVCFR is an important step towards simplifying cross border fundraising. It consists of a voluntary passport which funds can apply for. In order to get it they have to abide by certain uniform rules and requirements.

Long term financing of the European economy

Long-term investment represents spending that enhances the productive capacity of the economy. This can include energy, transport and communication infrastructures, industrial and service facilities, climate change and eco-innovation technologies, as well as education and research and development. Europe faces large-scale long-term investment needs, which are crucial to support sustainable growth. To fund long-term investment, governments, businesses and households need access to predictable long term financing.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 20

Guarantees

If you wish to apply for guaranteed financing you should contact one of the European Investment Funds (EIF) financial intermediaries in your country that signed up an agreement with the EIF under the CIP Programme. Please refer to http://www.accesstofinance.eu for more information.

9. All economic sectors: European investment bank loans

http://eib.europa.eu/projects/topics/sme/index.htm?lang=en All autonomous SMEs with fewer than 250 employees in the 27 EU Member States are eligible, as are MidCaps (autonomous enterprises with less than 3,000 employees). The subsidiaries or holding companies of groups with more than 250 employees are not eligible. All economic sectors are eligible except for a limited number of exclusions:

Ammunition and weapons, military/police equipment or infrastructure Projects which result in limiting people's individual rights and freedom, or violation of human rights. Projects unacceptable in environmental and social terms Ethically or morally controversial projects Activities prohibited by national legislation (only where such legislation exists)

During 2011, the EIB Group provided EUR 13 billion of finance for SMEs and midcaps companies. Overall more than 120 000 SMEs received EIB Group support across Europe last year. EIB loans for SMEs are channelled through commercial banks. The duration of the loans will be between 2 and 12 years, with a maximum amount of €12.5 million per loan. Between 2009 and 2011 signatures of EIB loans for SMEs and midcaps with intermediary banks between have reached some EUR 33 billion. More than 180.000 enterprises received finance from the EIB during this three year period.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 21

III. Internationalisation of SMEs Many of the programmes focus on SME’s internationalization do not provide direct funding to SMEs but to intermediaries, such as Public Administrations, active supporting SMEs in their internationalisation process. Your Europe, your opportunity Practical guide to doing business in Europe. http://europa.eu/youreurope/business/index_en.htm EU Gateway Programme – Japan and Korea Opportunities for EU Companies in Japan and Korea http://www.eu-gateway.eu Business outside the EU Different EU programmes, networks and information sources are available to face the challenge involved in entering global markets. Specific programmes are available for the following geographic areas:

- Accessing non-EU markets - Candidate countries - Mediterranean and Eastern Neighbour countries - Asia - South America

http://ec.europa.eu/small-business/most-of-market/international-business-outside-europe

IV. Contracts and grants

Part of the EU budget is allocated to companies and organisations in the form of calls for tender, grants or funds and

other financing programmes.

Contracts

The European Commission issues calls for tender in order to select the providers to buy goods and services - studies,

technical assistance and training; consultancy, conference and publicity services; books and IT equipment etc.

EC Practical Guide on contracting procedures http://ec.europa.eu/europeaid/work/procedures/implementation/practical_guide/index_en.htm Public contracts by EU policy http://ec.europa.eu/contracts_grants/contracts_en.htm

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 22

Grants Grants are direct financial contributions from the EU budget to support projects or organisations which promote the interests of the EU or contribute to the implementation of an EU programme or policy. Grants, funds and programmes by EU policy http://ec.europa.eu/contracts_grants/grants_en.htm

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 23

V. ANNEX I

Events and useful websites.

SME Week, 25-30 Nov 2013

http://ec.europa.eu/enterprise/initiatives/sme-week/

Coordinated by the European Commission, this campaign promotes enterprise across Europe in line with the Small

Business Act for Europe.

It is taking place in 37 countries, so events and activities – national, regional or local – will be as close as possible to

existing and potential entrepreneurs.

These events – organised by business organisations, business support providers and national, regional and local

authorities – will also enable existing companies to share their experience and develop further themselves.

The European SME Week aims to:

provide information on what the EU and national, regional and local authorities are offering as support to micro, small and medium-sized businesses;

promote entrepreneurship so that more people, and in particular younger ones, seriously consider becoming an entrepreneur as a career option;

give recognition to entrepreneurs for their contribution to Europe's welfare, jobs, innovation and competitiveness.

The main event will take place together with the SME Assembly and the European Enterprise Promotion Awards

Ceremony, on 25, 26 and 27 November 2013 in Vilnius, Lithuania.

Sector seminars on European Union External Aid Programs http://www.sectorseminars.eu

Small Business Portal

http://ec.europa.eu/small-business/

This portal aims to give advice to SME’s on the following areas:

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 24

Money, partners and public contracts.

Making the most of the market.

EU SME policy & statistics.

Support.

Follow the EU tenders http://ted.europa.eu/ (Tenders Electronic Daily)

National Portals

SPAIN

Instrumentos europeos de apoyo financiero al exterior - Ministerio Economia

ICEX - Programas de Cooperación de la UE

POLAND

Polish Agency for Enterprise Development

National System of Services for SMEs (KSU)

PORTUGAL

Quadro de Referência Estratégico Nacional (QREN)

Portal da empresa

UK

Making European funding work better for the UK economy

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 25

VI. ANNEX II

SMEs participation in Framework Program 7 (FP7)

Framework programs have been the main financial tools through which the European Union supports research and

development activities covering almost all scientific disciplines. The current FP7 runs from 2007-2013 with a whole

budget of 50bn. Its successor will run form 2014-2020 under the name of HORIZON 2020.

Since their launch in 1984, the Framework Programmes have played a lead role in multidisciplinary research and

cooperative activities in Europe and beyond. FP7 continues that task, and is both larger and more

comprehensive than earlier Framework Programmes.

The EC has paid special attention to the funding for SMEs under the FP7.

The below results monitor the participation of SMEs in the Cooperation Programme within FP7, up to Sept.

2012.

By the end of Sept. 2012, SMEs made up of 18.5% of all participations on the Cooperation Programme.

The EU average contribution going to SMEs participating in thematic research projects so far amount to about EUR

275,000/project.

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 26

GUIDE ON ACCESS TO FINANCE FOR SMEs

Santander Group – 27

SME participation and EU contribution per country