The European Investment Fund (EIF), whose more than €120 million loan guarantees helped Estonia and Europe’s music, film and other creative sectors to get through COVID-19, has launched a new round of financing for Estonia’s creative industries together with Finora Bank. With the aim to help Estonian creative businesses grow their companies in the face of the current crisis.
The aim is to offer loan financing on better terms to ambitious projects in the music, film, architecture or gaming sectors, in order to bring bold ideas to life and rapidly increase the export of Estonia’s creative industries.
According to Finora Bank’s analyses, the creative industries have a huge untapped potential to grow into one of the most prominent exporting industries in Estonia. This is demonstrated by the growing success of Estonian music, computer games and films abroad. To make sure that good ideas do not fall short of money, we have teamed up with the European Investment Fund for the second time.
During the previous period between 2020 and 2023, Finora, as a partner of the European Investment Fund for the Baltic States, financed more than 20 projects. The most well-known applicants were Tallinn Music Week, Kadri Kõusaare’s film studio Meteoriit and Music Estonia. According to Andrus Alber, the new period has even more funds than last time and the first projects will be funded already in October.
All small and medium-sized enterprises active in the cultural and creative sectors – film, TV, music, publishing, architecture, crafts, cultural heritage, theatre and design – are eligible for an EIF-backed creative loan.
As the size of a single creative loan is up to €250 000, this is leverage for projects with a strong business model. It is a Europe-wide programme, as the creative industries all over Europe face the problem of seasonality or staggered funding and limited loan guarantees. In essence, this opportunity will help to support periods when project funding or sales revenues have not come in yet, but there is a need to invest in, for example, development or marketing.
Inevitably due to the specific nature of the project-based creative industries, the payment schedule for creative loans is much more flexible than for other loans. For example, it has become quite common for the main instalment to be repaid only when the funding or income has been received.
With more than €120 million budget, the EIF’s Creative Industries Guarantee Programme was launched in 2016 with the aim of creating more than €600 million in new funding opportunities for Europe’s creative industries.
The EIF is part of the European Investment Bank Group and its core mission is to support European micro, small and medium-sized enterprises by helping them to access financing. Therefore, Finora Bank was an ideal choice for them as it is a bank for Estonian entrepreneurs focused on SME financing.