Guidelines on State aid to promote risk finance investments adopted by the Commission on 6 December 2021 (OJ C 508, 16.12.2021, p. 1-36).
The revised guidelines clarify and simplify the rules under which Member States can support and facilitate access to finance by European start-ups, small and medium-sized enterprises ('SMEs') and companies with a medium capitalization ('mid-caps'), while ensuring a level playing field in the Single Market.
Risk finance aid is an important instrument that Member States can use to support, in particular, innovative and growth-oriented start-ups, SMEs and certain types of mid-caps in the early stages of their development. These companies may face difficulties in gaining access to finance, despite their business potential. To tackle such market failures, the risk finance guidelines enable Member States, subject to certain conditions, to address this funding gap by attracting, through the provision of State aid, additional private investments into the eligible start-ups, SMEs and mid-caps, through well-designed financial instruments and fiscal measures.
The fitness check concluded on 30 October 2020 (Linked to the REFIT scoreboard fiche: Fitness check of 2012 State aid modernisation package, railways guidelines and short term export credit insurance) confirmed that the risk finance Guidelines were fit for purpose, but they also revealed that some targeted adjustments, including clarifications of some concepts and further streamlining were needed to further simplify the existing rules and clarify their application.
The revised risk finance guidelines entered into force on 1 January 2022, with no expiry date.
The guidelines will help to ensure that start-ups and small and medium-sized enterprises have access to finance which is essential to make the most of their growth potential and the green and digital transitions. That is why, following an extensive consultation process, the new guidelines contain targeted changes and further simplification of the rules. Among other changes, the revised risk finance guidelines, in particular:
• Limit the requirement to provide a funding gap analysis to the largest risk finance schemes and further clarify the evidence needed to justify the aid. In this respect, the evaluation showed and the consultation confirmed that Member States experience difficulties in quantifying the funding gap. To address this point, the revised guidelines only require a funding gap analysis for the largest risk finance aid measures, namely those that allow for investment amounts above EUR 15 million per individual beneficiary. Prior experience suggests that this simplification will apply to the large majority of new measures.
• Introduce simplified requirements for the assessment of schemes targeting exclusively start-ups and SMEs that have not yet made their first commercial sale. This will concern in particular the amount of evidence that Member States have to provide, as part of the ex-ante assessment that they have to submit to demonstrate why the aid is necessary, appropriate and proportionate.