- The Line of Guarantees, with a maximum amount of 100,000 million euros, aims to support Spanish companies and freelancers, guaranteeing access to the financing necessary to maintain activity and employment
- The Council of Ministers has approved the characteristics of the first section of the Line, for an amount of 20,000 million euros, 50% of which will be used to guarantee loans to the self-employed and SMEs
- The Line, which is retroactive to operations granted since March 18, allows financing to pay wages, invoices, currency or other liquidity needs, including maturities of financial or tax obligations
- The guarantee covers, in the case of freelancers and SMEs, 80% of new loans and financing renewals
- For the rest of the companies, 70% of the new financing granted and 60% of the renovation operations are guaranteed.
The Council of Ministers today approved the Agreement that includes the characteristics of the first tranche, for an amount of up to 20,000 million euros, of the Line of Guarantees for companies and the self-employed, included in Royal Decree Law 8/2020 on extraordinary urgent measures for face the economic and social impact of COVID-19.
The Government thus complies with the commitment with companies, especially with self-employed workers and SMEs, to implement the necessary measures to guarantee their liquidity and preserve productive activity and employment.
With this objective, the Line of Guarantees will guarantee new loans and renewals granted by financial entities to companies and the self-employed to meet the financing needs derived, among others, from payment of wages, invoices, need for money or other liquidity needs, including those derived from maturities of financial or tax obligations.
This Line will be managed by the Official Credit Institute, in collaboration with financial entities.
Characteristics of the Guarantee Line
The Guarantee Line was approved with an endowment of up to 100,000 million euros. The first tranche activated in today's agreement has an amount of 20,000 million euros, of which 50% will be reserved to guarantee loans to freelancers and SMEs.
Companies and freelancers affected by the economic effects of COVID-19 may request these guarantees, provided that the applicants were not in default on December 31, 2019 and in bankruptcy procedure on March 17, 2020. The guarantees will be retroactive. and may be requested for operations formalized after the entry into force of Royal Decree-Law 8/2020, which occurred on March 18.
The guarantee will guarantee 80% of new loans and renewals of operations requested by freelancers and SMEs. For the rest of the companies, the guarantee will cover 70% of the new loan granted and 60 of the renewals.
The guarantee issued will be valid for the term of the loan granted, with a maximum term of five years. The cost of the guarantee, between 20 and 120 basic points, will be assumed by the financial entities.
Interested companies and freelancers may request the guarantee for their operations until September 30, 2020. To do this, they must contact the financial entities with which the ICO has signed the corresponding collaboration agreements.
Financial institutions undertake to keep the costs of new loans and renewals that benefit from these guarantees in line with the costs applied before the start of the COVID-19 crisis.
They also undertake to maintain, at least until September 30, 2020, the limits of the working capital lines granted to all clients and, in particular, to those clients whose loans are guaranteed.
