The European Commission has launched a Call for Expressions of Interest relating to the establishment of a loan guarantee mechanism. The MEDIA Production Guarantee Fund will be aimed at supporting and facilitating European audiovisual companies' access to bank credit.

The Fund, which should be launched in the second quarter of 2010, will benefit from a total contribution of €8 million from the MEDIA Programme over a four-year period. It will share the financial risk related to the loans granted by banks to European independent audiovisual producers, by guaranteeing to cover a certain percentage of the loss in case of failure by the producer to reimburse the loan, thus encouraging local banks to more easily grant credit to film production companies.

The setting up and management of this Fund will be delegated to a European financial organisation under indirect centralised management. The Call will select the organisation that will be entrusted with the mission to implement the fund on behalf of the European Commission.

The Fund will be managed by a successful applicant fulfilling certain criteria. Applicants must be:

• a national or international public sector body (private banks, investment funds and venture capital funds can submit proposals in consortium, with a European financial institution which fulfils the public service mission criteria acting as a lead partner)
• established in a country participating in the MEDIA Programme
• able to demonstrate the technical capacity to carry out the task (which limits eligibility to financial institutions with appropriate registration in their home country).

The establishment of the Fund is a result of a study the Commission carried out in 2009 on the role of banks in film financing. The study concluded that following the global economic crisis, banks were more reluctant to have an active role in the sector and that one way of encouraging them to make credit available to audiovisual producers would be through a guarantee mechanism. It is envisaged that the MEDIA Production Guarantee Fund will create links and promote closer alliances between banks and SMEs in the audiovisual sector.

More information is available on the MEDIA Programme website.

The deadline to obtain the relevant application forms is 31 March 2010.

The deadline for proposals to be submitted to the European Commission is 15 April 2010.