If you have a business and you applied for the loans granted through the Covid I and Covid II lines, you will be able to access the new aid for SMEs that allow debt negotiation.
In May, the BOE published the Code of Good
Practices that supports the solvency of SMEs and the self-employed in
difficulties that received financing with public endorsement from the Official
Credit Institute (ICO), the Spanish Re-guarantee Company (Cersa) and the
Company Spanish Export Credit Insurance (CESCE).
The three main measures of the new aid for SMEs are:
1. Extend the
repayment term of the guaranteed credits. SMEs with debts
equal to or less than 1.8 million euros, which have already been subject to an
extension of the term, can request an additional extension of another 2 years. Companies
that have not benefited from this extension can request a 5-year
extension. The debt ceiling is lower for fishing companies, 270,000
euros, and 225,000 for agricultural companies. In any case, the extension
of the debt will not exceed 10 years.
2. Maintain the
guarantee when the credits are converted into participating loans. The bank should
consider the possibility of converting financing operations with public
guarantee into participatory loans that are not convertible into
equity. Thus, the company will be able to reinforce its resources, since
this type of loan is classified as capital from a commercial point of view.
3. Agree on a
reduction of the outstanding debt. It is a last resort that allows the
SME to negotiate with the bank the reduction of the outstanding capital, so
that the entity claims a part of the reduced amount from the guarantor and
assumes another part. The amount to be reduced can be up to 50% of the
principal guaranteed pending for each operation, if the drop in billing in 2020
was less than 70%. If the losses were higher, that amount can increase up
to 75%.
It should be clarified that the banks will
grant the extension of the maturity of the credits when the client meets the
requirements , but they can decide on the conversion into a participative loan
or the removal of the pending debt.
What are the requirements to apply for the grants?
You can request the
application of one or more measures, either once or successively, before the
bank with which you have the largest debt with public guarantee, since this
will be in charge of coordinating and informing the rest of the creditors to
reach an agreement.
To extend the repayment term of the
guaranteed credit, you will have to, among other requirements:
- Show that your billing fell by 30% in 2020 . If your billing
has not decreased so much, you can request an extension of the expiration
period, but the bank is not obliged to grant it.
- Be up to date in the payment of the guaranteed
credit or
another granted by the same bank, so you must not have incurred a default
of more than 90 days.
- Not appear in the delinquent files of the Bank of Spain's
Risk Information Center (CIRBE), nor be subject to bankruptcy proceedings .
- Not having been previously convicted of crimes
against the Treasury or Social Security.
To request the conversion of the loan
into a participating loan, without losing the coverage of the guarantee or the
reduction of the outstanding debt, in addition to the above requirements, you
will have to present a negative result after taxes in the profit and loss
account for fiscal year 2020.
What entities are
adhered to the Code of Good Practices?
The Code of Good Practices is
voluntarily adhered to by financial entities. The General
Secretariat of the Treasury will publish the names of the entities that are
added . The entities that do so will inform their clients and
undertake to facilitate the renegotiation.
These financial entities will send
the Bank of Spain the information required by the Control Commission on a
quarterly basis, in which members appointed by the ICO, Cersa and Cesgar, among
others, will participate. In fact, the SGRs have recently
adhered to this code as financial entities .
What are the deadlines to apply for these grants?
The deadline to
request these new grants for SMEs expires on October 15, 2021 . Financial
entities will have 45 days, from receiving the request with the complete
documentation, to make a proposal to the SME or the self-employed.