EIB Group backs BBVA deals to unlock €1.3 billion for small businesses across Spain

The agreements will allow the Spanish bank to mobilise approximately €1.3 billion, mainly for SMEs and entrepreneurs, with a separate allocation for mid-cap companies.

Small businesses and entrepreneurs in Spain are set to gain access to fresh financing after the European Investment Bank Group invested €259 million in two transactions with BBVA. The agreements will allow the Spanish bank to mobilise approximately €1.3 billion, mainly for SMEs and entrepreneurs, with a separate allocation for mid-cap companies.

The funding will help businesses pay everyday operating costs, cover cash shortages and move ahead with investment plans that rising interest rates might otherwise force them to postpone. More than €200 million will go towards green or sustainability projects, giving companies financial support to invest in their future.

More funding for businesses in lower-income regions

Much of the financing is expected to reach businesses in Spain's cohesion regions, where income per person is below the European Union average, and access to funding can make a greater difference to a company's prospects.

SMEs play a central role in Spain's economy through their contribution to output and employment. For a smaller business, access to finance on favourable terms can determine whether it has room to grow, improve its competitiveness or manage a temporary gap between incoming payments and operating expenses.

The agreements bring together BBVA and both parts of the EIB Group: the European Investment Bank and the European Investment Fund. Their support will expand financing opportunities for companies whose working capital needs and longer-term investment plans compete for limited resources.

How the two transactions make room for lending

The agreements use synthetic securitisation, a financing structure that transfers part of the risk on existing loan portfolios and helps free up capital for further lending. BBVA retains the underlying exposures, with the EIF covering losses within specified layers of risk and the EIB counter-guaranteeing part of the EIF's exposure.

In the two transactions, the EIF protects mezzanine tranches of €122 million and €138 million respectively. These sit between the junior tranches, which absorb initial losses, and the senior tranches, which carry lower risk. BBVA retains both the junior and senior tranches.

The first transaction references a portfolio of loans to SMEs and self-employed people assessed under the standardised approach, which uses regulatory rules to calculate credit risk. The second references leases to companies and SMEs under the internal ratings-based, or IRB, approach, which uses approved internal risk models.

The leasing transaction marks a first for BBVA: it is the bank's first synthetic securitisation backed by a leasing portfolio.

Both transactions initially use pro-rata amortisation, meaning the tranches reduce proportionately as the portfolios pay down. Depending on portfolio performance, repayment may switch to a sequential structure, under which senior tranches are paid down first.

Supporting greener investment and stronger capital markets

Both securitisations meet the EU's simple, transparent and standardised criteria, known as STS, which support consistent transaction standards and a more efficient capital market. The agreements reflect the EIB Group's use of securitisation to unlock capital for investment and reduce financial institutions' risk exposure. They also support the EU Savings and Investment Union, one of the group's eight strategic priorities.

The allocation of more than €200 million to green and sustainability projects connects the financing to the group's climate action and environmental goals. Its focus on businesses in lower-income regions supports economic, social and territorial cohesion, directing investment towards places where companies may face greater barriers to securing finance.

For the businesses receiving the funding, the practical value will be in having more room to manage cash flow, carry out planned investments and keep growing.