Fri. Apr 10th, 2020

The Government will guarantee 20,000 million in loans to avoid bankruptcy of companies and the self-employed


One week after the government announced that 100,000 million euros from credits will have endorsement public to improve the financial situation of companies, the Council of Ministers approved this Tuesday the small print to qualify for them. At the moment, the State will offer a guarantee in 20,000 million. Half for SMEs and freelancers and the other half for large companies.

New loans can be applied for at financial entities that have an agreement with the Official Credit Institute (ICO) with retroactive since the alarm state was activated. They will serve to finance new loans and refinancing of the Business and the freelancers who have been or will be left without liquidity due to the pandemic crisis and cannot afford payments, such as their employees’ payroll this March, or other expenses, including taxes.




Sections

Tranches have been set depending on the size of the company and the type of loan

The Ministry of Economy and Digital Transformation, headed by Nadia Calviño, It has been established various sections of guarantees based on the size of the companies. Up to 80% will be guaranteed for SMEs for both loans and renewals. In the case of large companies, there is a difference between new loans, which will have a 70% guarantee. And for the renovations of large companies, the guarantee is reduced to 60%.

The bank, through its employers, AEB, had requested to reach up to 90% for the micro, small and self-employed in order for credit to flow because otherwise the entities will be reluctant to grant loans if they see risk of default.

The Prime Minister, Pedro Sánchez, presides over a Council of Ministers

The Prime Minister, Pedro Sánchez, presides over a Council of Ministers
(EP)




The government spokeswoman and finance minister, Maria Jesus Montero, has pointed out that the validity of the guarantees will have the same duration as the life of the loan, with a maximum of 5 years.

Montero has stressed that these guarantees will serve to face different payments, “from wages to working capital needs, through financial or tax obligations.” He has also stated that banks have already launched their own financial lines.



The Minister of Finance has detailed that sections are established because the big ones “have more financial muscle”. In the following rounds, he has assured that the conditions will be maintained, but “if there is any modification that will be made”.


Taxation

Postponement in the payment of taxes

Regarding the postponement of payment of taxes, Montero recalled that they are allowed to defer payment of up to 30,000 euros. And that during the first 3 months it is free. That measure was approved in the first council of ministers, when the state of alarm was decreed.

Among the banks that have signed agreements with the ICO, for example, for the Companies and Entrepreneurs line, some stand out such as Caixabank, Banco Sabadell, Bankia, BBVA, Santander, Ibercaja, Unicaja, Bankinter and various rural savings banks.





Source link