Improving access by innovative SMEs to alternative forms of finance

Specific Challenge:

Sources of finance for innovative SMEs should be as diverse as possible in order to cater for their varying needs at different stages of the firm life-cycle and the innovation process. However, more needs to be done to improve such SMEs’ access to alternative forms of finance such as peer-to-peer lending, venture debt and convertible loans, equity finance provided by crowdfunding or business angels, and factoring and trade finance. In particular, there is a need to:

  1. Sensitise and improve capacity of financial suppliers such as National Promotional Institutions, Banks and enablers, such as National Central Banks, national innovation agencies providing finance about the potential of alternative finance.
  2. Facilitate the exchange of best practices amongst Member States and Associated Countries about regulatory and other measures aiming to make it easier for innovative SMEs to diversify their sources of finance.
  3. Make it easier for niche and specialist providers of alternative finance to market themselves to innovative SMEs seeking such forms of finance.
  4. Develop ways of matching such SMEs to alternative finance schemes and their providers.In particular, developing information architectures across the European Union taking into consideration the potential of technology innovation in finance.
  5. Improve the availability of financial and credit information about innovative SMEs to alternative lenders and investors.
  6. Improve innovative SMEs’ awareness and understanding  of the types of alternative finance available according to their circumstances and development phase.


Proposals should take account of a) the diverse levels of development of the provision of information on access by innovative SMEs to alternative sources of finance across the Member States and Associated Countries; b) target countries where the potential for improvement is highest; c) harness the potential of innovative financial technology; d) take account of best practices with a view to their eventual replication. They should:

  1. Develop a capacity-building strategy and consequent implementation plan that makes use of techniques (tailored for both women and men) such as awareness raising campaigns, coaching, mentoring, workshops, courses, training materials (in particular through social media) as well as knowledge transfer of best practices.
  2. Validate the implementation plan by stakeholders including innovative SMEs, alternative finance providers and public authorities.
  3. Execute the implementation plan.
  4. Review the impact of the implementation plan and possibly adapt the scheme in the light of experience.

The approach taken must complement and build on existing initiatives in this area at EU, national and regional levels, working with them where possible. The proposals must also address how to ensure the continuity of the action beyond the implementation period of the call. Proposers must have and must demonstrate deep knowledge of the issues around access to risk finance by innovative SMEs, have proven experience in this field, and significant experience of capacity-building.

The selected proposal should contribute to the Pilot European Innovation Council.

The project duration should be a maximum period of 24 months.

The Commission expects to fund between 1 and 3 proposals.

Expected Impact:

  1. Increased use of alternative forms of finance by innovative SMEs.
  2. Emergence and growth of alternative finance options available to innovative SMEs in Member States and Associated Countries where such options are less available or developed at present.
  3. More cooperation between different suppliers of finance in order to crowd in existing EU, national and regional financing structures targeting innovative SMEs.
  4. Replication in Member States and Associated Countries of successful approaches to encouraging the take-up of alternative finance by innovative SMEs.
Opening date:
25 April 2017
Deadline: 07 September 2017

Source: HORIZON 2020 – The European Commission