Application period opens for the sixth tranche of Covid-19 guarantees

The Council of Ministers has announced the requirements for accessing the sixth tranche of Covid-19 guarantees for SMEs and self-employed workers. The period for applying for this aid for the national business community is now open. This financial support is aimed at businesses that require liquidity or need to finance their investments.

Specifically, the Government has allocated €10 billion to this aid line, to be distributed among self-employed workers and SMEs. All other companies will also be able to benefit from a total of €5 billion.

Features of the new loans

– For transactions with debtors receiving cumulative public aid totaling no more than €1,800,000, the term of the guarantee issued will match the term of the loan, up to a maximum of 10 years.

– For transactions subject to Commission Regulation (EU) No 1407/2013 of December 18, 2013, on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (or the corresponding sector-specific Regulation), the term of the guarantee issued will match the term of the loan, up to a maximum of 5 years.

– For transactions with debtors receiving cumulative public aid totaling more than €1,800,000, the term of the guarantee issued will match the term of the loan, up to a maximum of 8 years, and the nominal amount to be guaranteed may not exceed the highest of:

– Twice the client’s annual wage costs, taking its costs for fiscal year 2019 as a reference.
– 25% of the client’s turnover in 2019.
– With appropriate justification and on the basis of a self-certification by the client of its liquidity needs, the amount of financing may exceed the above criteria in order to cover liquidity needs for the eighteen months following the granting of the financing in the case of self-employed workers and SMEs, or for the following 12 months in the case of companies that do not qualify as SMEs.

Maximum guarantee percentages

– up to a maximum of 80% in financing transactions for SMEs and self-employed workers

– up to a maximum of 70% in financing transactions for larger companies

Guarantee fee

– For transactions with debtors receiving cumulative public aid subject to Section 3.1 of the Temporary Framework for State aid measures to support the economy in the current COVID-19 outbreak, totaling €1,800,000 or less, the cost of the guarantee will be 20 basis points.

– For transactions subject to Commission Regulation (EU) No 1407/2013 of December 18, 2013, on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid (or the corresponding sector-specific Regulation), the cost of the guarantee will be 20 basis points.

– For all other transactions, the guarantee fee will be the one set out in the table in Annex I to the resolution.

Deadlines and conditions

These new guarantees may be applied for until December 1, 2021, provided that the beneficiaries were not in default before the health crisis, that is, before December 31, 2019.