State aid

The GBER exempts risk finance measures of up to €15 million per SME from prior scrutiny by the European Commission. Meanwhile, the Risk Finance Guidelines, aimed at SMEs and mid-caps with high growth potential, establish state aid conditions for amounts above €15 million.

These frameworks - along with the Temporary State Aid Exemption framework, have been particularly relevant to determine whether or not private equity backed firms could access public support during the Covid-19 pandemic. 

Revised Risk Finance Guidelines have been published on 6 December 2021 - the main change of relevance from a venture capital perspective is the increased flexibility for businesses of a certain age to remain eligible to risk finance aid. The GBER was revised most recently in July 2023.  

How does it affect private equity?

Around 85% of the companies in which private equity invests are small and medium-sized enterprises ("SMEs"). Private equity cares deeply about creating the right environment for European companies to flourish. Creating a competitive and investment-friendly ecosystem, including a robust state aid framework is an important cornerstone in this regard.