Spain Launches €5Bln Line Of Guarantees For Self-Employed Workers And Companies

Spain’s Council of Ministers has approved the characteristics of the first tranche of the Line of Guarantees for Self-Employed Workers and Companies, for a total of €5 billion.

This line, with a maximum amount of €10 billion, supports access to funds for companies affected by increasing energy and raw material costs and is part of the National Response Plan to the Economic and Social Consequences of the War in Ukraine.

The Minister for Territorial Policy and Government Spokesperson, Isabel Rodríguez said that the aim is for companies to be able to keep operating. Rodríguez specified that, for guaranteed amounts of up to €400,000, the guarantee covers up to 80% of the amount of the loan and the term of the financing can be up to ten years.

For larger loans, 80% of the new financing will be guaranteed for self-employed workers and SMEs, and up to 70% for other companies. They will have a repayment period of up to eight years. All companies will be entitled to an initial grace period of 12 months on the loan principal.

Isabel Rodríguez said that the government also set up an exceptional ICO-COVID line to deal with the economic consequences of the pandemic. It financed almost 750,000 companies, mostly SMEs and self-employed workers, and mobilised €14 billion. The sectors that benefited most were transport, food distribution, trade, textiles and fashion.

The spokeswoman said that behind these figures there are people, households and families who have been able to establish their businesses and stay in employment.

In this context, Rodríguez announced that the Council of Ministers plans to discuss the reduction of electricity bills for households and companies next Friday. The European Commission has pre-authorised the proposal submitted by Spain and Portugal and both governments are working to make the necessary adjustments and approve the mechanism in parallel.