COSME financing for SMEs
On the 16th of October 2017, the European Commission published a case study of a European SME having benefited from COSME funding to develop its business.
Through the European Union’s COSME programme, loans to companies are counter-guaranteed by the European Investment Fund (EIF). This increases the access to finance for many SME’s. One of the businesses to benefit and improve their business is BNM from Slovenia.
With a new boost in productivity, upgraded production techniques and modern management methods, the company is on the right track to contribute to the revival of the old industrial hub of Slovenia’s second largest city.
BNM d.o.o. is located in Tezno district, where trucks and buses were manufactured until 1996. Established in 2011, BNM specialises in metal forming, complex stamping and welding for the automotive industry. Banks would not back the young company’s much-needed upgrade due to lack of collateral.
Gorazd Brečko, manager of BNM says, “It is very difficult to imagine that the project would have been carried out. It is true that we are very resourceful and we have very good relationships with our strategic customers. However, we would have been forced to look for older equipment, which in all likelihood would not have the same effect for our customers, as well as for our competitiveness.” In 2016, a loan from the Slovene Enterprise Fund (SEF) opened up new possibilities. SEF provided a loan of more than €490,000, with an 80% counter-guarantee from the EU’s COSME programme.
Thanks to the COSME-backed loan, BNM purchased new technological equipment: laboratory equipment, a machine for edging, a measuring machine, a welding robot, and they significantly modernised the production processes. The company plans to increase revenues by 43.6% (from €8.01 million in 2015 to €11.50 million in 2018). The team also recruited 4 extra people to work on the new machines. Now the company no longer has to outsource part of the manufacturing, increasing their efficiency and profitability.
Gorazd adds, “We already convinced a new customer of our competences and with our equipment. He wants to drastically expand mutual cooperation in the coming years. With new machines, we can offer better technology to our customers and be more competitive.” The future looks bright for BNM as they are “rapidly growing and developing”. Their main goal is to upgrade their B-grade supplier status to an A-grade.
In 2015 the European Investment Fund (EIF) and the Slovene Enterprise Fund (SEF) signed a COSME agreement. Mag. Maja Tomanič Vidovič, director of the SEF, says “Through the COSME programme we enable micro, small and medium-sized enterprises access to better, faster and easier bank loans with lower demands for additional insurances from the banks. Results of 2016 show we supported 437 enterprises with a total value of €82.3 million. The expressed interest was very high and we used the allocated resources ahead of schedule. In 2017 we will issue another €92 million of guarantees. I have no doubt the plan will be met since by the end of April we have already supported 105 enterprises with €16.75 million.”
Businesses can contact selected financial institutions in their country to access EU financing through their access to finance website.
Source: European Commission
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In: Growth & Competitiveness, Research & Innovation, SMEs