COSME is the EU programme for the Competitiveness of Small and Medium-sized Enterprises (SMEs). Allocated a financial envelope of EUR 2.3 billion for the 2014-2020 period, it is designed to improve SMEs’ access to finance and markets. It should also support entrepreneurship and provide more favorable conditions for business creation and growth. Under the previous programming period, 2007 to 2013, SME support initiatives had been included in the Competitiveness and Innovation Framework Programme (CIP).
The biggest share (‘not less than 60%’) of the financial envelope for COSME is for two financial instruments: the Loan Guarantee Facility (LGF) and the Equity Facility for Growth (EFG). Both are implemented in close cooperation with the European Investment Fund. The LGF provides financial intermediaries with guarantees that help them to provide more loans and leases to SMEs. The EFG is designed for SMEs that need capital to grow.
The funds allocated to the Enterprise Europe Network (EEN) are important, since this network assists SMEs to make the most of business opportunities in the EU and beyond. Erasmus for Young Entrepreneurs is another key COSME action, running through the 2014-2020 programming period. It is a mobility scheme which helps to promote entrepreneurship by placing newly established or potential entrepreneurs with an SME run by a well-experienced entrepreneur in another country.
COSME will mobilize between €14.3 billion and €21.5 billion via the LGF. It is estimated that between 220 000 and 330 000 firms will benefit from it by 2020. €1 from the Union budget should result in €20-30 in debt financing or €4-6 in equity investments over the lifetime of the COSME programme. However, it is important to remember that SMEs can access loans and venture capital from other sources of EU financing besides COSME. Depending on the policy area, examples of such sources include Horizon 2020, Creative Europe, the Programme for Employment and Social Innovation, the European Structural and Investment Funds, and the European Fund for Strategic Investments.