The European Investment Fund is committing €20 million to a new Finnish private credit vehicle, SP Growth Fund Ky, to provide loans to small and medium-sized businesses in Finland.
The fund is intended to offer growth financing to companies with what the EIF called strong commercial potential, at a time when growth capital has become harder to access in Finland as banking regulation has tightened, the EIF informed on Thursday.
SP Growth Fund will focus on technology-driven businesses with limited tangible assets, offering loans ranging from €500,000 to €2 million.
The EIF’s commitment helped the fund reach a first closing of €34 million, more than two-thirds of the way towards a target size of €50 million. Other initial backers include Finnish institutional and private investors.
Focus on Finnish growth firms
The financing will be provided through a private credit fund — a type of lender that operates outside traditional bank lending — as European policymakers look for additional ways to support business funding.
“Europe needs more financing options for innovative companies that are ready to grow but struggle to access traditional bank lending,” EIF Chief Executive Marjut Falkstedt said.
The EIF stated its investment is supported by InvestEU, the European Union’s investment programme.
SP Growth Fund is managed by SP Growth Partners Oy, an independent Finnish investment manager specialising in financing growth companies.
The fund will invest exclusively in Finnish businesses, including small mid-caps.
“Many Finnish growth companies have healthy businesses and strong ambitions, yet securing financing has become increasingly difficult,” SP Growth Partners co-founder Matias Itkonen noted.
