The European Investment Fund (EIF) has partnered with Danish corporate bank kompasbank to support SMEs in Denmark.

Under the agreement, kompasbank said it will provide at least €175 million in new loans to around 840 businesses.

The EIF will provide guarantees to enable kompasbank to offer improved lending conditions such as reduced interest rates and longer maturities.

The guarantees are supported by the InvestEU programme, which provides the EU with long-term funding through substantial private and public funds. The initiative aims to trigger more than €372 billion in additional investments between the period of 2021 and 2027.

“Access to finance for SMEs continues to be an issue around the Nordics,” said EIF chief executive Marjut Falkstedt. “Danish businesses play a leading role in the green transition and we’re happy to build on our partnership with kompasbank to support the availability of targeted financing for small companies – especially when it comes to supporting skills and financing climate change mitigation.”

The EIF also said that the move will allow kompasbank to target riskier segments including startups.

kompasbank will also provide loans which relate to skills and educational training.

Additionally, the partnership will focus on supporting investments which facilitate the green and sustainable development of the Danish economy such as projects targeting climate change mitigation.

"We often find that Danish SMEs have to drop specific growth initiatives or are forced to lower their ambitions because they do not have sufficient and fast enough access to financing,” said Michael Hurup Andersen, founder and chief executive of kompasbank. “It is bad for companies' competitiveness - but also for the economy and job creation - because it costs money when good and sound investment cases are put on standby."

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