The Government approves the last section of the Guarantee Line, with priority for the self-employed and SMEs, and tourism and automotive sector

The Government approves the last section of the Guarantee Line, with priority for the self-employed and SMEs, and tourism and automotive sector

  • Activation by sections has made it possible to adapt the Guarantee Line to the needs of companies, making it one of the most widely used in Europe
  • The fifth section has a budget of 15.5 billion euros
  • 7.5 billion to guarantee loans to SMEs and the self-employed and 5 billion for the rest
  • 2.5 billion euros are reserved to boost the tourism sector by guaranteeing loans to SMEs and the self-employed for liquidity or investment
  • A specific section of 500 million euros has been opened to boost the automotive sector
  • The amounts not drawn down by 30 June will be distributed among the institutions in proportion to the amount of the guarantee used to date, with the exception of the new sections for tourism and automotive , which will be allocated according to demand
  • With the data available to date, 565,110 loans have been guaranteed for a total of 52,761 million euros, which has allowed 69,023 million to be channelled into the productive fabric
 
16 June 2020. Today, the Council of Ministers approved the agreement activating the fifth and last section of the Guarantee Line to guarantee the liquidity of companies and self-employed workers. This line was approved by the government on 17 March for a total of 100 billion euros to deal with the economic effects of COVID-19 and is the largest mobilisation of public guarantees for start-up companies in Spain.
 
Activation by sections has enabled the Line to be adapted to the needs of different companies and sectors at all times, making it one of the most widely used in Europe.
 
This section has a budget of 15.5 billion euros, of which 7.5 billion is made available to the self-employed and SMEs, in line with what has been done so far to prioritise smaller companies. The rest of companies will have 5 billion in guarantees.
 
In order to boost and reactivate the tourism sector, 2.5 billion euros are set aside to meet the financing needs of the self-employed and SMEs in the tourism sector and related activities. In this way, the Government continues to strengthen its support for tourism, one of the most affected by the economic consequences of COVID-19. The funds may be used to cover both liquidity needs and the investments required to improve, extend or adapt facilities and equipment.
 
Companies and businesses in the tourism, leisure and culture sector are those that have received the greatest volume of financing through the Guarantee Line. This financing is in addition to that initially received through the Thomas Cook Line for an amount of 400 million euros, which enabled 4,700 companies in the sector to obtain loans to cover their liquidity needs.
 
In addition, 500 million euros are allocated to the acquisition or leasing by companies and self-employed persons of land transport vehicles for professional use, in order to boost investment, contribute to the renewal of the vehicle fleet and encourage sustainable mobility.
 
With the activation of the last section of the Guarantee Line, a total of 67.5 billion euros has been reserved for SMEs and the self-employed; 
 
25 billion to the rest of the companies; 4 billion to guarantee the emissions of the Alternative Fixed Income Market (MARF by its Spanish acronym); 2.5 billion to reactivate the tourism sector; 500 million to support the counter-guarantee that CERSA grants to the mutual guarantee societies of the autonomous communities and 500 million to the acquisition or leasing of vehicles destined to road transport.
 
Likewise, the collaboration with the 123 financial institutions that manage the Line is enabling companies from all sectors of activity and from all provinces of Spain to access this guarantee programme, making it one of the greatest and most important examples of the success of public-private collaboration.
 
Guarantee Line Features
 
The fifth section of the Guarantee Line has the same characteristics and the same processing method as the previous ones for loans to companies and the self-employed. Only companies affected by the economic effects of COVID-19 may apply for these guarantees until 30 September, provided that the applicants were not in default on 31 December 2019 and in bankruptcy proceedings on 17 March 2020.
 
The guarantee line for the self-employed and companies will be distributed between operators using the same criteria established for the previous sections, depending on the market share communicated to the Bank of Spain by each financial institution at the close of 2019.
 
The maximum amount assigned to each entity will be valid until 30 June. After that date, the amounts of the guarantee allocated but not used by the entities shall be distributed among the rest of operators, proportionate to the amount of the guarantee that they have used to that date.
 
The amounts allocated to the tourism and automotive sectors will be distributed on demand on the basis of the appropriations approved by the financial institutions.
 
Over 69 billion euros in financing
 
Spanish companies have already received 69,023 million in guaranteed financing from the Guarantee Line. 
With data as of 14 June, 565,110 financing operations have been approved, with a guaranteed amount of 52,761 million euros.
 
The largest volume of operations and financing is concentrated in SMEs and the self-employed, with 555,288 loans approved, 98% of the total, and a guaranteed amount of 38,975 million euros. This has allowed these companies to receive 48,750 million euros of financing to guarantee their liquidity and cover their working capital needs.
 
The rest of the companies have received more than 20,272 million euros in financing, through 9,822 operations guaranteed with 13,804 million euros.