Europe Launches $135 Million Program to Back Entertainment Companies
The program will provide guarantees to help small and mid-sized firms secure bank loans.
A week after British voters opted to leave the European Union, Europe has rolled out a new scheme to boost investment in EU entertainment companies.
The plan will see the European Commission and the European Investment Fund put up €121 million ($135 million) in loan guarantees for small and mid-sized companies in the audiovisual sector, helping them to secure bank loans to grow their business.
The commission expects the plan will generate more than $667 million in loans for Europe's entertainment sector over the next six years.
The program, which launches Friday, will see the EIF provide interest-free guarantees to banks and other financial institutions that provide loans to companies across the audiovisual sector — from film and TV firms to video game, music and multimedia producers, arts festivals, publishing houses and performing arts companies, among others. The EIF will manage the scheme on behalf of the European Commission. Companies should begin to benefit from the program as early as the end of this year.
"Creative minds and companies need to experiment and take risks to thrive, for our society and for our economy,” Gunther Oettinger, European commissioner for the digital economy and society, said Thursday in a statement. “We are helping them to get the bank loans they would normally not get."
EIF deputy chief executive Roger Havenith added that the program will help European entertainment companies “scale up and access market-based financing solutions” while providing risk protection for financiers.
It is unclear whether companies in the U.K. will have access to the funds in the program post-Brexit.
According to EU figures, Europe's creative and cultural sectors represent more than 7 million jobs in the EU and account for 4.2 percent of the region's gross domestic product. The bulk of companies in the sector, however, are small and often have limited access to credit.
In the coming days, the EIF will publish a call from applications from financial institutions interested in participating the program. The EIF will select a final group of banks, guarantee and leasing companies that will then be able to offer financial products to companies using the scheme.
The plan is part of the EU's Creative Europe program, which aims to support Europe's creative industries and has a budget of more than $1.6 billion over a seven-year period from 2014-2020.