- Amongst other items, the agreement provides for the application of ICO’s main financing facilities for 2010, the implementation of the Financial Facilitator and the imminent launching of the Sustainable Economy Fund.
- One of the most outstanding novelties of ICO’s 2010 Facilities is the financing of VAT and second-hand assets, together with the extension of loan repayment terms to 12 years.
- From today, both the Financial Facilitator portal and the customer service telephone service are available to SME and the self-employed.
December 21 2009. Today, the Second Deputy Prime Minister and Minister of Economy and Finance, Elena Salgado, presided over the formalisation of agreements of cooperation for the start-up of the 2010 Self-employed and Enterprise Backing Plan. The Plan was signed by the Chairman of Instituto de Crédito Oficial (ICO), José María Ayala, and senior officers from those credit institutions which showed the highest level of activity in granting loans under the ICO-SME 2009 Facility.
The purpose of the agreement is to finance the requirements of the self-employed and SME during 2010, along with large-scale projects related to the sustainable economy. Amongst other items, it provides for the application of ICO’s main financing facilities for 2010, the implementation of the Financial Facilitator and the imminent launching of the Sustainable Economy Fund.
ICO Financing Facilities for 2010
The agreement’s formalisation marks the start-up of the five key financing facilities for 2010: Domestic Investment (covering the former ICO-SME and ICO-Corporate Growth Facilities), International Investment, Entrepreneurs, Liquidity and Housing.
The facilities have been designed fundamentally to provide the self-employed and enterprises with suitable financing schemes to enable them to undertake their investment projects and meet their corporate finance and liquidity requirements.
So as to ease access to finance, the allocations to the facilities will be in accordance with the applications received from the enterprises. Moreover, the facilities’ terms have been improved and characteristics regarding repayment terms and grace periods have been streamlined in accordance with entrepreneurs’ and financial institutions’ requests.
The main novel features affecting the Domestic and International Investment Facilities, Entrepreneurs and Liquidity are as follows:
- It is now possible to access finance for VAT.
- Second-hand assets are eligible for finance and restrictions based on accounting groups have been eliminated.
- Vehicles may be financed for up to an amount of €24,000 plus VAT.
- Finance is available for the acquisition of enterprises.
- The repayment term is extended to 12 years.
- Two tranches are established for enterprises, depending on the number of employees, with two financing ceilings:
- Tranche I. The self-employed, micro and small enterprises with up to 49 employees, which may access loans for a maximum amount of €2m.
- Tranche II. Medium-sized enterprises and other, which may access financing for up to €10m.
The ICO-Domestic Investment Facility covers the former ICO-SME and ICO-Corporate Growth Facilities. Repayment terms are three, five, seven, 10 or 12 years, with grace periods.
The International Investment Facility provides for an interest rate allowance for the self-employed and SME with fewer than 50 employees, the aim being to boost the activities of these enterprises in other countries.
Entrepreneurs starting up a new corporate project in 2010 may benefit from an allowance of up to 1.5% through the ICO-Entrepreneurs Facility, designed to foster the start-up of new enterprises and professional activities.
The main novel feature of the ICO-Liquidity Facility is the amalgamation of the two Liquidity Facilities for SME and Medium-sized Enterprises which were started up in 2009. The facility’s ongoing purpose is to meet enterprises’ working capital requirements.
The ICO-Housing Facility, which seeks to promote rented housing, has been renewed with conditions similar to those set in 2009, including the possibility that ICO may arrange operations with a credit institution other than the one that initially granted the promotional loan.
Financial Facilitator
In accordance with instructions received from the CDGAE (the Government’s Delegate Commission for Economic Affairs) last October, ICO has set up an instrument known as the Financial Facilitator for the purpose of improving access to credit for those self-employed workers and SME whose loan applications (for up to €2m) have been turned down by financial institutions.
The Facilitator’s website is operative as from today and may be accessed through ICO’s own website (www.ico.es). A free telephone service (900 567 777) is also available for those wishing to enquire.
In addition, an agreement of cooperation with the Higher Board of Chambers of Commerce is in the pipeline, whereby signatory Chambers of Commerce may participate and assist in the project.
The process commences as soon as the applicant completes the form on the Facilitator website. On receipt of the data, an IT programme assesses the application’s eligibility in accordance with a number of requirements and the applicant is requested to provide documentary proof of his/her situation.
Subsequently, if the application receives a favourable appraisal, it is channelled to the credit institution chosen by the applicant from among those which have entered into an agreement of cooperation with ICO. Once the institution selected has accepted the application, it will get in touch with the self-employed worker or entrepreneur so as to commence the appropriate procedure.
Sustainable Economy Fund
The agreement signed today also provides for the start-up of the Sustainable Economy Fund, which has been provisioned with an allocation of €20,000m for financial years 2010-2011. ICO will provide €10,000m and the rest will come from the financial institutions party to the agreement. The Fund is expected to be approved before the end of the year.
FORMALISATION OF THE AGREEMENT OF COOPERATION BETWEEN ICO AND FINANCIAL INSTITUTIONS FOR ICO’S 2010 FACILITIES
Those attending the signing ceremony were as follows:
- The Second Deputy Prime Minister and Minister of Economy and Finance, Elena Salgado
- The Secretary of State for the Economy, José Manuel Campa
- The Chairman of ICO, José María Ayala
- The Managing Director of Banco Santander, Enrique García Candelas
- The BBVA Manager for Spain and Portugal, Juan Asúa
- The Chairman of Banco Popular Español, Ángel C. Ron Güimil
- The Deputy Managing Director of Banco Sabadell, Blanca Montero
- The Chairman of La Caixa, Isidro Fainé Casas
- The Managing Director of Business at Caja Madrid, Matías Amat Roca
- The Chairman of Bancaja, José Luis Olivas Martínez
- The Managing Director of Retail Banking at Banesto, Gonzalo Alonso Tejuca
- The Chairman of Caja del Mediterráneo, Modesto Crespo Martínez
- The Chairman of Ibercaja, Amado Franco Lahoz