The Council of Ministers has approved to extend to 22,000 million euros the endowment of ICO mediation lines for 2012 and to reorient some of them, to facilitate financing for companies, particularly SMEs and entrepreneurs, their main recipients. The objective is to improve the operation of these financing lines and thus constitute a more effective vehicle to support the business fabric.

For this, two key elements are modified:

  • The envelope of the lines is expanded. The provision initially planned for 2012 is raised by 15.8%, to 22,000 million euros. Regarding the use of the lines in 2011, the rise is close to 40%. This increase has no budgetary impact, since the ICO captures financing in the capital markets.
  • Prices are adjusted. A decrease in the cost for the final customer is expected as a consequence of the expected improvement in the cost of financing the ICO. Likewise, the margin of financial institutions is slightly increased in order to encourage the commercialization of ICO lines. This margin is the compensation entities receive for assuming the risk of operations.

Also, some lines are reoriented.

  • ICO-Investment Line. Finances investment projects in the interior that include the acquisition of productive fixed assets, vehicles or companies. The endowment is increased from 8,000 to 9,000 million euros and the possibility of financing working capital is included, with a limit of 10% of the total financing amount.
  • ICO-Internationalization Line. Finances investment projects abroad, including the acquisition of fixed assets, vehicles or companies. The endowment doubles to 2,000 million euros, including an additional financing tranche, without a bonus, of 1,000 million euros. The possibility of financing working capital is included, with a limit of 20% of the total investment.
  • ICO-Liquidity Line. Finances working capital for the self-employed and companies that face temporary situations of credit restriction. The endowment increases, going from 6,000 million euros to 8,000 million euros.
  • ICO-Entrepreneurs Line. It replaces the ICO-Business Development Line. Finances investment projects for freelancers and professionals who have started their activity in the last five years. The endowment increases, which goes from 750 million euros (not counting the “capitalization” tranche, which disappears) to 2,000 million euros.
  • ICO-Housing Line. It promotes the rehabilitation of homes and buildings. It has an endowment of 1,000 million euros. As a novelty the financing of the reform of common elements of the buildings is allowed. The so-called “Housing stock tranche” that provided financing to housing developers is eliminated on condition that the homes are put up for rent. This elimination occurs in accordance with the policy of disposing of the housing stock.

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