ING and the European Investment Fund (EIF) have signed a guarantee agreement that will allow ING to provide up to €128.5 million in new lending to fast-growing small and medium-sized enterprises (SMEs) in the Netherlands,.
The funding will be offered as subordinated debt, a type of loan that ranks behind other “senior” debts if a company fails, and is intended to strengthen firms’ balance sheets, the EIF informed in a release on Thursday.
ING said the arrangement is designed to help Dutch SMEs finance projects linked to innovation, digitalisation and sustainability.
The guarantee is backed by the European Commission’s InvestEU programme, which supports investment by using EU budget guarantees.
Two guarantee schemes
The agreement includes an “innovation & digitalisation guarantee” and a “sustainability guarantee”, with at least €102.8 million allocated to the first and an initial €25.7 million to the second.
“By covering parts of their portfolios with guarantees, ING can free up more capital to support businesses,” the EIF said in a statement.
Examples of eligible uses could include growth financing for a software company, replacing outdated machinery with more energy-efficient production lines, or a strategic acquisition linked to a circular economy transition, ING Netherlands’ head of business banking Laurens de Vos said.
