InvestEU: financing investments when bank loans reach their limits

A new production facility, automated manufacturing, medical technology, digitalization, or international expansion: Many companies have compelling investment plans, but financing often becomes the biggest hurdle. Especially for investments in the millions, banks often require additional collateral or reduce the amount of financing. This is exactly where InvestEU financing comes in.

InvestEU is the European Union’s central investment program, which uses guarantees to make it easier for companies to access loans, equity capital, and other financing instruments. As a result, the program enables investments that would often be difficult to realize with traditional financing.

Important: InvestEU is not a grant program, but rather an investment financing instrument. Used correctly, it can significantly expand financing options — especially when combined with national funding programs.

What is InvestEU?

InvestEU is a European Union program for the 2021–2027 funding period. Unlike traditional grant programs, InvestEU does not award funding directly to companies. Instead, the EU provides guarantees to financing partners such as the European Investment Bank (EIB), the European Investment Fund (EIF), or national development banks. On this basis, these institutions can finance large or higher-risk investment projects and offer companies better financing terms. This enables investments that, without this risk-sharing, would often not be financed at all or only to a limited extent.

The goal of European investment support is to stimulate private and public investment in future-oriented projects and to close financing gaps.

For which investment projects is InvestEU particularly worthwhile?

In our experience, InvestEU is particularly well-suited for companies with investment projects starting at around 500,000 euros. As the size of the project increases, the program generally becomes more attractive.

InvestEU supports financing for economically viable investments with European added value. These include, for example, investments in sustainable and social infrastructure, in digitalization and innovation and in business growth. Technology-oriented companies in particular often benefit from the expanded financing options.

• Expansion of production capacity
• Construction of new production and logistics facilities
• Purchase of modern machinery and equipment
• Automation and robotics
• Digitization of production processes
• Investments in energy efficiency
• Hydrogen and decarbonization projects
• Research and development
• International Expansion
• Business Succession
• Innovation Projects in Medical Technology
  

Which companies can benefit from InvestEU?

The program is aimed at, among others:

• small and medium-sized enterprises (SMEs)
• mid-cap companies
• large enterprises
• project developers
• municipalities
• municipal companies
• research institutions
• start-ups
• scale-ups

InvestEU is particularly interesting for companies planning innovative or strategically important investments.

What funding amounts are available?

A major advantage of InvestEU is its high level of flexibility. Depending on the financing partner, funding ranging from hundred thousand euros to tens or even hundreds of millions is possible.

The exact amount of financing depends on several factors. These include, in particular, the investment volume, the size of the company, its creditworthiness, available collateral and the economic viability of the business model and project structure.

Why do many companies fail to secure InvestEU financing?

In practice, we consistently encounter similar problems:

The wrong financing partner

Applications for InvestEU are not submitted directly to the European Commission. Companies must select the right financing partner. If this choice is made too late or incorrectly, the entire financing process can be delayed.

Incomplete Project Documentation

Many investment projects make good economic sense but are inadequately documented. Missing cash flow projections, incomplete business plans, or unclear investment objectives make securing financing considerably more difficult.

Grants are not taken into account

A common mistake is to rely exclusively on debt financing. In many cases, InvestEU can be effectively combined with grant programs, such as the ERDF, GRW, or other national funding programs. This can reduce equity requirements and financing costs.

Funding strategy starts too late

Those who wait to explore funding opportunities until after the investment decision has already been made often miss out on financial flexibility.

Example: InvestEU in business practice

For example, a medium-sized mechanical engineering company is planning to build a new production facility and purchase automated manufacturing equipment. The total investment amounts to approximately 6 million euros. The company’s primary bank views the project favorably in principle but is requiring additional collateral due to the project’s size.

By securing financing through an InvestEU financing partner, part of the credit risk can be mitigated. This improves access to financing, and the company receives more favorable financing terms than it would with a traditional loan solution.

At the same time, an assessment is being conducted to determine whether individual components of the investment - such as research and development work or energy efficiency measures - can also be supported through national subsidy programs. This results in a financing solution that effectively combines debt financing and grants.

Why is professional grant consulting worthwhile?

InvestEU is not a standardized financing product. The optimal financing depends on numerous factors, such as company size, industry, project structure, and location.

A specialized grant consulting firm can assist with:

• Assessing eligibility
• Developing a customized funding strategy
• Selecting suitable financing partners
• Combining InvestEU with other funding programs
• Coordination with primary banks and investors
• Compilation of application documents
• Support through the process until a financing decision is made

Well-structured financing can yield significant economic benefits, particularly for investments in the millions.

EurA will assess which financing and grant options are available for your project, develop a customized funding strategy, and support you from the initial analysis to successful financing.

FAQ on InvestEU Funding

Is InvestEU a grant program?

No. InvestEU does not provide grants. The program helps companies access financing such as loans, guarantees or equity capital.

At what investment level does InvestEU become worthwhile?

In practice, InvestEU is often suitable for investments starting at around 500,000 euros. The larger the project, the more attractive the program often becomes.

Can InvestEU be combined with other funding programs?

Yes. Depending on the project, InvestEU can be combined with national grant programs. This can help reduce financing costs and equity requirements.

Our Tip

Incorporate grant programs into your investment planning as early as possible so you don’t miss out on funding opportunities. This allows you to optimally combine financing options and take additional funding opportunities into account early on.

Conclusion

InvestEU is one of the most important European instruments for financing large-scale investment projects. Companies gain access to extensive financing options that often would not be feasible with traditional bank loans alone. Investment financing can be a key component of a long-term growth strategy.

Since InvestEU is primarily implemented through financing partners and can often be combined with other funding programs, it is worthwhile to develop a funding strategy early on.

Are you planning an investment of 500,000 euros or more?

Let us review which financing and funding options are available for your project.

Text: Jan Bernlöhr

Image: Nusrat - stock.adobe.com