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.
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.
About BNP Paribas’ French Retail Banking (FRB) business
The Group’s retail-banking business in France employs over 28,000 employees and serves 6.9 million individual customers, 560,000 self-employed professionals and VSEs (Very Small Enterprises), 31,000 companies (SMEs, mid-sized and large corporates), and 73,000 non-profit organisations. FRB is the market leader in France in corporate and private banking. With an organisation based on specialised client categories and designed to ensure optimal service, FRB offers a broad range of products and services from current accounts to sophisticated financing for companies and wealth-management solutions. FRB teams work in over 2,000 branches and 300 specialised hubs which include Wealth Management Centres, SME Centres, Innovation Hubs and Business Centres. The teams are deeply committed to meeting the needs of clients and to serving the wider economy. FRB also has a substantial presence on the social networks, notably Facebook, Twitter and Foursquare. BNP Paribas makes considerable ongoing investments in innovation and service quality, and in May 2013 launched Hello bank!, the first digital-native bank in Europe designed for mobile devices. This new customer channel complements FRB's suite of online-banking solutions that include Customer Contact Centres, internet and mobile banking, Net Agence (online branch), Net Crédit (online loans), Net Epargne (online savings & investments) plus 6,000 ATMs available for the convenience of both individual and professional clients throughout France.
BNP Paribas Investment Partners is the BNP Paribas Group’s asset management specialist. BNP Paribas Investment Partners offers the full range of asset management services to both institutional and private investors around the world. BNP Paribas Investment Partners has more than 3 000 employees2 in 34 countries2 , including around 700 investment professionals2 , and manages assets totaling EUR 532 billion2 .
1 European Long Term Investment Funds are a specific type of fund vehicle created by the EU legislators to promote the long-term financing of infrastructure projects by unlisted companies or listed SMEs.
2 Source: BNP Paribas Investment Partners, as of 30 June 2016, assets under management and advisory