The executive’s commitment is to release public guarantees of up to 100,000 million to inject liquidity into the business structure. Today it has launched the first 20,000 with a risk assumption of 80% for SMEs and self-employed and 70% for large companies.
The Council of Ministers, held today, March 24th, approved the first 20,000 million euros to guarantee loans to the corporate structure from credit institutions. While the risk assumed in the tourism and hospitality sector is generally 50%, the government followed up today and announced that it will assume 80% of the risk of default on loans for liquidity granted to SMEs and the self-employed and 70% for corporations.
This is the first mobilization of funds of the total announced by the Prime Minister of more than 100,000 million (117,000), Pedro Sanchezat his public appearance on March 17 at a battery of economic measures. The rest are mobilized in different sections as the situation evolves and the behavior of the first is analyzed.
The loans are managed by the credit institutions working with the Official Credit Institute (ICO) through the Companies and Entrepreneurs Line. They will be the ones who will decide whether to grant or refuse the loan and the ones who will deliver the money. The loans will be requested retrospectively from the entry into force of the state of emergency, which will be extended for another fifteen days.
LENDING INSTITUTIONS TO APPLY FOR THE LOAN
According to this provision, interested parties must process the loan at one of the following entities: Santander, BBVA, Caixabank, BCC (Grupo Cajamar), C. Cooperativo, Bankinter, Caja Rural de Teruel, Liberbank, Banco Sabadell, Caja Rural del Sur, Caja Rural de Navarra, Rural Cabin of Jaén, Rural Cabin of Zamora, Rural Cabin of Asturias, Globalcaja, Rural Cabin of Aragón (Bantierra), Rural Cabin of Granada, Unicaja and Abancaja. As clarified on the ICO page, “the list is updated daily with the companies that join.”
Each of these entities has its own aid package or open lines for this purpose, and according to the government spokesman Maria Jesus Monteroin today’s performance along with Salvador island, Minister of Health, the executive has not agreed on a specific interest rate for these loans and has delegated this function to the corporate bodies. However, he expressed his confidence in the ease and flexibility of the loans, taking into account the safety cushion that the state offers, assuming most of the risk in the event of non-payment in operations that do not always seem very clear. They can be accessed by companies “from all kinds of industries” that are part of the national economic fabric.
According to Montero, the willingness of the banks to support the government’s economic measures has been high from the start. He also thanked the offer of numerous companies willing to convert their production lines to self-supply the country with urgent products during the current health crisis.
Regarding tax moratoriums and deferrals, Montero ratified the measures already announced on March 12 by Pedro Sánchez, ie a deferral of tax payments for a maximum of 6 months with a grace period of 3 months. An extension of the closure order to the business operations operated today was also ruled out.