Factsheet for measure
DK-1992-18/2615
– measures in Denmark
The Growth Fund
Vækstfonden
Background information
The purpose of the Growth Fund is to promote growth and innovation in small and medium enterprises in all industries as a way to achieve greater socio-economic returns.
To face the COVID-19 crisis, the state introduced two schemes in the framework of the Growth Fund:
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one relating to the SMEs
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one relating to the large companies
Another measure introduced to face the pandemic early 2020 is the COVID-19 Start Loan. It consists of a loan targeted at young businesses.
Content of measure
To face the COVID-19 crisis, the state introduced two schemes in the framework of the Growth Fund, each of them providing an overall available support of DKK 25 billion (€3.36 billion):
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one relating to the SMEs (companies with fewer than 250 employees and having a turnover of no more than DKK 372 (€50 million) million/year or a total annual balance sheet of a maximum of DKK 320 million/year (€43 million); and
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one relating to the large companies (250 or more employees or a revenue of more than DKK 372 million/year (€50 million) and a balance sheet total of more than DKK 320 million/year (€43 million).
The Growth Fund is a state investment fund which aims to encourage growth in companies by providing venture capital, loans and guarantees to selected companies that can present a potential for growth and job creation based on a concrete project. The strategy of the fund is implemented in three main focus areas, the fund:
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invests in funds that subsequently invest the capital in companies. The investments in funds take place in close cooperation with private investors
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invests with own capital in start-up companies that present a strong growth potential, but have difficulty in securing sufficient risk capital.
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provides loans directly to small and medium-sized companies with reasonable growth plans that cannot provide adequate security or do not have sufficient own capital to get a loan at the bank.
With reference to SMEs, the instrument allows the state to provide a guarantee of 80% of new bank loans issued to companies affected by the COVID-19 crisis. In relation to large companies based in Denmark, the Growth Fund can guarantee 70% of the loans or credit issued to cover company's losses as a consequence of the COVID-19 crisis. Both schemes were valid until 1 October 2020 and has been prolonged without an end date.
The main characteristics of the third instrument implemented to face the COVID-19 crisis, that is to say the COVID-19 Start Loan, are:
The loan is on DKK 0.4 - 2 million (€0.05 - 0.27 million);
There is a requirement for cofinancing from other actors (no specifications about the actors) in a ratio of up to 1:3;
The interest rate is based on Cibor 3 + 5%;
The duration is up to six years;
The scheme ran in the first place until 30 September 2020, but has been prolonged without a new fixed end date (as at October 2020).
Use of measure
The Growth Fund is evaluated every three years. An evaluation of the Growth Fund from 2021, shows that the Growth Funds activities in 2020 has been a part of creating and maintain 20.000 workplaces, and has increased the BNP with 15 billion DKK (€2 billion), and contributed with 8 billion DKK (€1 billion) by tax revenue.
In the spring of 2019, the supported companies employed more than 65,500 employees and had a total turnover of more than DKK 107 billion (€14.4 billion). In 2017 a total of 1,652 companies benefited from cofinancing via the fund. Overall DKK 4.9 billion (€653 million) was invested.
Target groups
Actors and funding
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Actors
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Funding
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National government
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National funds
Other
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Unknown
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Unknown
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
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Unknown
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Main level of involvement: Unknown
Involvement
Unknown
Views and reactions
Unknown
Sources
