EU backing secures millions for Danish creative and cultural businesses.
Danish businesses in the design, game development, IT development, music, filmmaking, or the art sectors can now get easier access to capital and at a lower interest rate. This is the result of a collaborative initiative between EIFO and the European Investment Fund. The agreement is supported by the European Union under its InvestEU initiative, which aims to trigger more than €372 billion in additional investments up to 2027. As a result, EIFO can offer attractive loans backed by an EIF-guarantee for up to 300 million DKK to Danish businesses within the creative and cultural professions.
“Access to finance for businesses in the creative and cultural sectors continues to be an issue in Denmark and across the EU in general,” Said EIF Chief Executive Marjut Falkstedt. “It can be difficult for banks to rate the businesses’ credit, as there is often an assumption of a higher risk in connection to creative projects, even though this is not necessarily true. Through this collaboration, our aim is to eliminate part of the risk and help to channel financing towards the cultural and creative sectors that play such a critical role in our society and identity.”
“The creative and cultural businesses hold the potential to putting Denmark on the world map and be catalysts for growth, innovation, and renewal. It is vital that we acknowledge the large potential and competitive power within these industries, and there is a need for better terms in financing for these businesses. With our willingness to take risks in financing, EIFO paves the way for those who dare to think bigger, and we are glad to be able to contribute to this very special agreement through EIF,” says Signe Thustrup Kreiner, Chief Commercial Officer, EIFO.
The creative and cultural sector covers more than 7 million jobs within the EU and is accountable for 4.2 percent of the block’s BNP. The sector provides a substantial contribution to the economy, and this new agreement targets some of the many financial bottlenecks within the sector. The objective is to ensure that rigid credit evaluations and limited options for loans do not stand in the way of the sectors’ ability to develop itself.
Traditionally, the financing of the industries has been characterized by support programmes and subsidies, but EIFO sees great potential for financing through loans, which this new guarantee program enables. Specifically, the agreement will make EIFO even more flexible when addressing the budget of the business at hand, and in some instances the business can achieve an interest rate reduction of up to 4% when compared to the usual interest rates offered by EIFO.