ICO 2021 Financing Lines.

The Official Credit Institute (Instituto de Crédito Oficial, ICO) has published the call for the new ICO 2021 financing lines. They are aimed at companies, entrepreneurs, and professionals who need credit to provide greater liquidity to their business or to undertake new projects, both in Spain and abroad.

These ICO 2021 financing lines are in addition to those already in place and approved by the Government to help companies and professionals affected by the Covid-19 crisis.

The ICO 2021 financing lines, whose application period covers the whole of 2021, are intended to provide financing to companies and entrepreneurs, to finance internationalization projects, and to fund special programs to promote foreign trade.

ICO Companies and Entrepreneurs 2021

This financing line is aimed at:

– Self-employed workers
– Public and private companies and entities, whether Spanish or foreign, that carry on their business activity in Spain, regardless of whether their registered office and tax domicile are in Spain or whether their capital is Spanish or foreign.
– Individuals, homeowners’ associations (comunidades de propietarios), and groupings of homeowners’ associations, provided that the purpose is the renovation of their homes.

The following are financed under this ICO line:

– Investment projects and/or general operating needs.
– Technology needs.
– Acquisition of new or second-hand fixed assets.
– Passenger cars and commercial vehicles.
– Fitting-out and refurbishment of facilities.
– Acquisition of companies.
– Renovation or refurbishment of buildings, common elements, and homes in the case of homeowners’ associations, groupings of homeowners’ associations, and individuals.

The financing takes the form of a loan, leasing, credit line, or renting arrangement, with a maximum amount of €12.5 million per client per year. It may be requested as one or more loans, provided that their combined total does not exceed that amount. The interest rate is fixed or variable plus the margin set by the relevant credit institution. Guarantees are those determined by the credit institution through which the transaction is processed, other than a guarantee from a mutual guarantee company (Sociedad de Garantía Recíproca, SGR) or from the State Agricultural Guarantee Company (Sociedad Anónima Estatal de Caución Agraria, SAECA). The repayment term is 1 to 6 years with a 1-year grace period, 7 to 9 years with a grace period of up to 2 years, or 10 to 20 years with a grace period of up to 3 years.

ICO SGR/SAECA Guarantee 2021

This financing line is aimed at:

– Self-employed workers.
– Public and private companies and entities that have the guarantee of a mutual guarantee company (SGR) or of the State Agricultural Guarantee Company (SAECA), regardless of their registered office or tax domicile and the nationality of their capital, and that make investments in or outside Spain or wish to cover liquidity needs. Where the investments are made outside Spain, both companies domiciled in Spain and those domiciled abroad in which a Spanish company holds at least 30% of the capital are included.

The following are financed under this ICO line:

– Liquidity needs (current expenses, payroll, payments to suppliers, purchase of goods, etc.).
– Investments in and outside Spain, covering new or second-hand fixed assets, passenger cars and commercial vehicles, fitting-out and refurbishment of facilities, acquisition and creation of companies, and creation of companies.

The financing takes the form of a loan, leasing, or credit line for investment, and a loan for liquidity, of up to €2 million in one or more transactions. The interest rate is fixed or variable plus the margin and the cost of the guarantee set by the credit institution and the SGR/SAECA, depending on the repayment term. The repayment term is 1 to 6 years with a grace period of up to 1 year, 7 to 9 years with a grace period of up to 2 years, or 10, 12, or 15 years with a grace period of up to 3 years.

ICO Commercial Credit 2021

This financing line is aimed at:

– Self-employed workers
– Companies with their registered office in Spain that issue invoices arising from firm sales of goods and services to a debtor located in Spain. It also covers companies that hold a supporting document agreed with another company with its registered office in Spain, under which the purchasing company undertakes to acquire goods from the company requesting the financing, regardless of the name and form given to that document.

To that end, the line finances advances on invoices maturing no later than 180 days from the date on which the transaction is signed. It also provides pre-financing to cover the production and manufacturing costs of the goods or services to be sold in Spain.

It is a financing agreement whose terms are set by the credit institution and the client. The client may request up to a maximum balance of €12.5 million per client per year, in one or more transactions. It carries a variable interest rate plus the margin set by the credit institution, with the guarantees required by the institution.

ICO International 2021

This financing line in turn comprises two lines, each with its own specific conditions and requirements:

Tranche I Investment and Liquidity

This financing line, in the form of leasing or a credit line at a fixed or variable rate, with a maximum amount of €12.5 million, is aimed at:

– Self-employed workers.
– Spanish public and private companies and entities, whether domiciled in Spain or domiciled abroad with at least 30% Spanish capital.

The following are financed:

– Liquidity (current expenses, payroll, payments to suppliers, purchase of goods, etc.).
– Investment outside Spain.
– New or second-hand productive fixed assets.
– Passenger cars and commercial vehicles.
– Acquisition of companies.
– Creation of companies abroad.
– Fitting-out and refurbishment of facilities.

Tranche II Medium- and Long-Term Exporters

This financing line, in the form of a loan at a fixed or variable rate, with a maximum amount of €25 million, is aimed at granting:

– Supplier Credit: financing for Spanish companies for the sale of goods or services to companies with their registered office outside Spain

– Buyer Credit: financing for companies with their registered office outside Spain for the acquisition of goods or services exported by companies with their registered office in Spain

– Supplementary Financing: financing for the foreign company acquiring the Spanish goods or services, where the purchase has been covered in full by a Buyer Credit.

Both financing lines are loans/leasing for investment, with a fixed or variable interest rate plus the margin set by the credit institution according to the repayment term. Under Tranche I, the repayment term is 1 to 6 years with a 1-year grace period, 7 to 9 years with a grace period of up to 2 years, or 10 to 20 years with a grace period of up to 3 years. Under Tranche II, it is 2 to 6 years with a grace period of up to 1 year, 7 to 9 years with a grace period of up to 2 years, or 10 to 12 years with a grace period of up to 3 years. An arrangement fee and an early repayment fee may be charged, and guarantees may be required.

ICO International Channel 2021

This financing line is aimed at:

– Self-employed workers.
– Public and private companies and entities with Spanish interest, with their registered office in or outside Spain, that have “Spanish interest.”
– Companies with their registered office outside Spain that acquire goods or services on deferred payment terms from companies with their registered office in Spain, or outside Spain but with Spanish interest.

The line finances investment and liquidity, as well as medium- and long-term exports, which encompass Supplier Credit, Buyer Credit, and Supplementary Financing.

It is a type of contract determined by the relevant credit institution, on the terms established by that institution, aimed at financing liquidity and productive investments outside Spain. No maximum amount per client is set.

ICO Exporters 2021

This financing line is aimed at self-employed workers and companies with their registered office in Spain that issue invoices arising from firm sales of goods and services to a debtor located outside Spain. It also covers those that hold a supporting document agreed with a company with its registered office outside Spain, under which the purchasing company undertakes to acquire goods from the company domiciled in Spain, regardless of the name and form given to that document.

The line finances invoice advances and pre-financing, with up to 100% financing.

It is a type of contract determined by the relevant credit institution, for up to €12.5 million, on the terms established by that institution, aimed at financing liquidity and productive investments outside Spain.

In times of crisis such as the present, these financing lines may be essential to provide liquidity to a company or business and to cope with the economic difficulties it may be facing.