The FINANCIAL — BNP Paribas is now offering an innovative financing solution designed to help Small and Medium-Sized Enterprises (SMEs) and growth-oriented Midcaps with turnover totalling €10 – 250 million to carry out their key long-term projects. The solution consists of a combination of a bank loan and a loan provided through a new European SME debt fund.
Unlike major corporates, SMEs are not generally able to draw on the bond markets or make use of private placements to finance themselves. Now, in order to enable smaller and medium-sized firms to pursue strategic goals on a longer-term basis, BNP Paribas is offering a financing solution that combines two tranches under a single contractual arrangement – a traditional medium-term bank loan repayable over some 5 years, plus a long-term loan of 7 to 10 years provided via the debt fund, reimbursable in full at the maturity date, according to BNP Paribas.
The new fund, managed by BNP Paribas Investment Partners (BNPP IP), which comes under the ELTIF1 category, will be supported by a number of European institutional investors including the BNP Paribas Group. The aim is to attain a size of between €300 and €500 million. The European Investment Fund (EIF), part of the European Investment Bank (EIB) Group, has helped to design and set the parameters of the fund, whose objectives include stimulating new opportunities for innovation, growth and job creation in Europe.
Denis Laplane, Head of the Enterprise Department at the BNP Paribas Group’s French Retail Banking division, underlined: “SME growth is vital for the economy and job creation in France. As an extension of our ‘BNP Paribas Entrepreneurs 2016’ plan, this new offering constitutes a financing solution which is highly suitable for long-term strategic projects, company transfers and/or to back SMEs’ ambitious growth plans.”
Explained David Bouchoucha, Head of the Institutional Investors Section at BNP Paribas Investment Partners: “This first-ever loan fund for SMEs provides institutional investors with a really innovative way to diversify their credit exposure. This new offering complements our already broad range of investment solutions based on the disintermediation of corporate financing.”
Based on the BNP Paribas Group’s integrated banking model and supported by its strong financial advisory capabilities, this new offering is also underpinned by the close involvement of the Group’s Retail Banking arm in the local economic fabric and the capacity for innovation that is the hallmark of BNPP IP asset management.