- The Council of Ministers has approved the characteristics of the first section of the Line, for an amount of 8,000 million euros, of which 5,000 will be used to guarantee investments by the self-employed and SMEs, and 3,000 from other companies
- The State guarantee covers 80% of new loans for self-employed workers and SMEs, and 70% for other companies
- The ICO will also manage this Line and the public-private collaboration model is maintained with financial institutions and the allocation of funds based on their market share after the success of the liquidity line launched in March
- So far, through the Line of Guarantees for liquidity, 741,542 operations have been guaranteed, which have allowed channeling 92,314 million of financing to the productive fabric
The Council of Ministers has approved the Agreement that includes the characteristics of the first section of the new Line of Guarantees to boost business investment, for an amount of 8,000 million euros.
This new Line of Guarantees was approved in Royal Decree-Law 25/2020 on urgent measures to support economic recovery and employment. If the liquidity and circulating needs of the productive fabric were covered with the previous line, now the investment of the self-employed and Spanish companies is also promoted.
With this objective, the new Line of Guarantees will guarantee the loans for the realization of new investments, as well as the expenses related to them and with the improvement of the productive process. It may also cover financing needs derived from the payment of wages, invoices or the expiration of financial or tax obligations, among others.
Characteristics of the Line of Guarantees for liquidity
This new Line of Guarantees has an endowment of 40,000 million euros. The first tranche activated in today's agreement has an amount of 8,000 million euros, of which 5,000 will be used to guarantee loans to freelancers and SMEs, and 3,000 to the rest of companies.
Given the success of the Line of Guarantees approved by Royal Decree-Law 8/2020 on extraordinary urgent measures to face the economic and social impact of COVID-19, the design, management and allocation model are maintained.
The Official Credit Institute (ICO) will be in charge of processing the new line, maintaining the model of public-private collaboration with financial entities.
Activation is repeated by tranches, which allows adapting the allocation of resources to the needs of companies, maintaining the flow of financing at all times. The allocation of guarantees among operators in proportion to their market share is also continued, ensuring that clients of all financial institutions have access to guaranteed financing.
Likewise, companies that request this guaranteed financing may not have their headquarters in tax havens and the guaranteed resources may not be used to pay dividends.
The guarantee will guarantee 80% of the new operations of the self-employed and SMEs and 70% of the loans requested by the other companies. The maximum term of coverage of the guarantee is extended to eight years (compared to five in the liquidity line), to adjust it to the longer amortization period required by investments.
Self-employed and interested companies may request the guarantee for their operations until December 1, 2020.
Guarantee Line Data
With a charge to the Guarantee Line to guarantee the liquidity needs of the self-employed and companies, a total of 741,542 operations have been approved, with data as of July 26, backed by 70,206 million euros, which have allowed channeling financing to the productive fabric by amount of 92,314 million euros.
More than 97% of the guaranteed operations (719,830) are concentrated in SMEs and the self-employed, with an amount of 51,003 million, which has allowed them to obtain financing for 63,808 million euros.
