Calviño approves 5,000 million ICO credits to alleviate the impact of the war between SMEs and the self-employed

Gonzalo D. VelardeFOLLOW, CONTINUEMadrid Updated: 05/10/2022 15:00h

The Government approved this Tuesday the first tranche of 5,000 million euros of financing for SMEs and the self-employed with ICO credits to mitigate the impact of the war in Ukraine on the activity of small and medium-sized businesses. Thus, the Executive deploys this first section of the new line of guarantees, which has a maximum amount of 10,000 million, to
guarantee access to liquidity for the affected companies
by the increase in energy costs or raw materials derived from the war in Ukraine and the latest blocks produced in the main ports of China.

Although it is true that the situation mainly debits the capacities of SMEs and the self-employed, the group will have up to 400,000 euros for the guaranteed amounts, the guarantee that is covered through the guarantee is up to 80% of the amount of the credit, with a financing term of up to 10 years.

In loans of more than 400,000 euros, 80% of new financing is guaranteed to the self-employed and SMEs and up to 70% to other companies, with a repayment term of up to 8 years.

In addition, according to
measure approved in the Council of Ministers
, all companies, regardless of the guarantee they request, will be entitled to an initial grace period of 12 months. During the subsequent press conference, Isabel Rodríguez recalled that it is not the first time that the Government has implemented exceptional measures of these characteristics and has made reference to the ICO-Covid guarantee lines.

With this ICO line associated with the Covid health crisis, almost 750,000 companies have been financed, mostly SMEs and the self-employed, and 140,000 million euros were mobilized to alleviate the impact of the crisis, especially in the most affected sectors, such as transport, consumption, commerce or textiles. Territorially, they have been highly demanded in the Community of Madrid, Andalusia and Catalonia.

"The proper functioning of this line is what has caused the Government to once again be at the side of companies and the self-employed to sustain their economies in the face of another crisis," highlighted the Government spokesperson and Minister for Territorial Policy, Isabel Rodríguez, at the press conference after the Council of Ministers.

damage reflection

Furthermore, it is so true that self-employed workers and SMEs are the most affected by the impact of the pandemic, the breakdown of the supply chain, the stoppage of transport and now the war in Ukraine and the blockade of Chinese ports, as that this group has had external financing to face challenges such as the extraordinary cessation of activity or these lines of credit with public guarantee.

In this way, although the approval of the 5,000 million may be a breath of fresh air for thousands of businesses, "the approval of the new line of credit gives a measure of the impact of the crisis on the collective", explains the economist and partner of Bernal & Sanz Bujanda, Miguel Angel Bernal.

In addition, the expert assures that although there is no excessive concern in the banking sector about the possibility of non-payment of these debts, he does warn that those that do occur will go against the general deficit as they are guaranteed by the public sector. "And the deficit can't take it anymore," warns the economist, recalling the IMF forecast of 5.3% for this year.

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