The Council of Ministers has approved a sixth tranche of 15,000 million euros of the guarantee line of the Official Credit Institute (ICO) which will be aimed at supporting investment, as reported by the Government spokesperson, María Jesús Montero. Of these 15,000 million, 10,000 million euros will go to SMEs and the self-employed, while the remaining 5,000 million will be able to benefit larger companies.
Due to the high use of the line of guarantees of 100,000 million euros intended to cover the liquidity needs of companies as a result of the crisis generated by the Covid-19 pandemic, the Executive created last July a new line of guarantees for 40,000 million to cover liquidity needs and boost investment activity.
“This last tranche of 15,000 million has a clearer objective in investment, with 10,000 million for SMEs and the self-employed and, the rest, for other larger companies,” explained Montero.
This ICO Investment line is aimed at companies that are entering a recovery phase and is being “a highly demanded instrument” in recent weeks.
In fact, the Ministry of Economic Affairs has reported that in recent months the volume of granting credits with State endorsement has doubled, especially in the self-employed and SMEs segment, so that the section assigned to SMEs and the self-employed the Agreement of the Council of Ministers of July 29, 2020, for a total of 5,000 million euros, is “almost completely ready”.
Through this line, 67,832 operations have been guaranteed for an amount of 5,618 million euros, which have enabled the channeling of financing amounting to 7,260 million euros. 97.6% of the guaranteed operations correspond to SMEs and the self-employed, with 4,345 million guaranteed and financing of 5,436 million euros, while the rest of the companies have requested 1,606 operations with a guarantee of 1,273 million euros and financing of 1,823 million.
The companies and the self-employed have allocated practically all the loans granted to making new investments, or the renovation, adaptation and reopening of their establishments and businesses and the restart or development of their activity, “which shows the reactivation of the economy ”, according to the Ministry.
The new loans will benefit from the recent improvement of up to ten years in the repayment terms and will maintain the same characteristics, the same guarantee coverage and the same procedure as the previous ones for loans for companies and the self-employed, up to 80 % for freelancers and SMEs and 70% for other companies.
They can be requested until December 1, 2021, as long as the applicants were not in default before the arrival of the pandemic, that is, on December 31, 2019.
The ICO guarantee lines launched in March 2020 have guaranteed 1,070,100 operations to date, with guarantees of more than 96,662 million euros, which has made it possible to mobilize 127,135 million euros in financing for the productive fabric.
“The mechanism of these guarantees has allowed them to be one of the most widely used in the whole of Europe and they are of proven effectiveness,” the Government spokesperson stressed.