French fintech October, which connects companies seeking financing with individual and institutional lenders, is to lend 38 million euros to VSEs and SMEs in France's tourism sector, thanks to a guarantee from the European Investment Fund (EIF).
Guarantee fund released by the European Investment Bank
The European Investment Bank (EIB) has set up a pan-European guarantee fund, to which the 27 member states of the European Union contribute 25 billion euros.
The aim of this guarantee fund is to complement the business support schemes set up by European governments, particularly for SMEs, by guaranteeing bank transactions and financing innovative companies.
In total, it will mobilize up to 200 billion euros, 7 times more than the European Investment Bank's annual SME financing. In France, it will be based on technological solutions developed by fintech October, which will be responsible for processing loan applications from the tourism sector, which has been hard hit by the crisis.
Precise risk assessment by the lending platform
Thanks to October's expertise and technology, the European Investment Fund will be able to distribute its guarantees faster and more accurately.
The fintech will be able to lend between €30,000 and €1.5 million to French tourism SMEs for periods ranging from 18 months to 7 years, based on an analysis of their pre-crisis situation, as well as a study of their field of activity.
This isn't the lending platform's first try. In September 2020, it had already introduced loans reserved for the tourism industry, with deferred repayment for 18 months.
The deal was made possible by a €258 million capital raising in the summer of 2020 from the Intesa Sanpaolo bank, six insurance companies and the Caisse des Dépôts et Consignations (CDC).
The loss of revenue in the tourism sector is estimated at 60 billion euros for the whole of 2020.