Brussels, 05/02/2003 (Agence Europe) - The European Commission opened a formal investigation procedure into the British 'SBS Incubation Fund', which does not seem to respect certain criteria foreseen by the Community framework for state aid with regional finalities. The aim of this Fund is to grant small companies (so-called incubators) loans at privileged rates in order to simplify their development in the start-up phase. To do this the Fund has a budget of EUR 115 million over four years, and the loans may cover up to 50% of the investment costs for infrastructure projects, and well as partially finance the working capital required to implement these projects. However, British authorities assure that these aid do not exceed the ceiling of EUR 100,000 per company, over a three year period as foreseen by the 'de minimis' Regulation adopted at the beginning of 2001 by the Commission (this regulation foresees an automatic authorisation of aid without the obligation of notification under certain conditions). According to the terms of the project, larger companies located in the more developed regions of the United Kingdom could benefit from this measure. However, this possibility is contradictory with the guidelines applicable to regional and national aids, which limits this type of aid to regions with the greatest difficulties. On the other hand, according to the Commission, it is not clearly established that the aids will respect the ceilings set by existing rules. Moreover, the loans could cover part of the working capital of companies, which may constitute operational aid, aid which is only authorised for the most disadvantaged regions. Finally, while British authorities feel that the aid respects the rules foreseen for 'de minimis' aids, whose amount will be limited to what is strictly necessary, the Commission presently questions the extent to which respect for these conditions may be ensured.