The European Investment Fund (EIF) and alternative lender iwoca have signed an agreement to provide funding to more than 3,000 UK small businesses, the parties have announced.

The initiative has the support of the European Fund for Strategic Investments (EFSI), through which the Investment Plan for Europe is being deployed by the European Commission.

The guarantee scheme will allow iwoca to lend GBP 40m (EUR 60m) to over 3,000 small businesses in the UK. The loans will be provided as a result of a guarantee from the EIF under the COSME programme with financial backing from the European Commission.

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EU Commissioner for Internal Market, Industry, Entrepreneurship and SMEs Elżbieta Bieńkowska said she was “very pleased to see that the Investment Plan for Europe is becoming a reality on the ground”.

“Thanks to EU funding, more than 3,000 SMEs in the UK will be able to access GBP 40m in funding through new loans,” she continued.

The EIF is part of the European Investment Bank group. It was set up to support Europe’s micro, small and medium-sized businesses by helping them to access finance.

It designs and develops both venture and growth capital, guarantees and microfinance instruments which specifically target that market.

EIF’s total net commitments to equity funds amounted to over EUR 8.8bn at end 2014. It has investments in over 500 funds, including in the hightech and early-stage segments.

Chief executive Pier Luigi Gilibert praised partner iwoca for “giving entrepreneurs rapid access to finance to help them create and grow their businesses”.

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