Subsidies vs. Loans. A practical loan case: ICO

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Continuing with this new block of tips to get you up to date on the aid and subsidies that we have in Spain, this week we want to talk about a page where you can know all the help, throughout the geography: The page of the National System of Publicity of Subsidies, and the page of the General Secretariat of Industry and of the Small and Medium-Sized Enterprise. In Addition, we want to note the importance of differentiating very clearly between subsidy or public Aid and Credits or loans (for example, the ICO that we will expand later). As a general rule, and in accordance with the General Subsidies Act, a subsidy means any provision of money made by Public Administrations, in favour of public or private persons, and which fulfils the following requirements:

  1. That the delivery be carried out without direct consideration of the beneficiaries.
  2. That the delivery is subject to the fulfillment of a certain objective, the execution of a project, the realization of an activity, the adoption of a singular behavior, already realized or to develop, or the concurrence of a situation, owing the beneficiary Fulfil the material and formal obligations that would have been established.
  3. That the project, action, conduct or situation financed is intended to promote an activity of public utility or social interest or to promote a public purpose.

In Summary, in the case of subsidies, provided that they are fulfilled with the objectives that gave rise to their concession and can justify their employment, the amounts must not be returned. On the other hand, and as we advance, we will deepen the Credits and Loans of the Institute of Official Credit (ICO). To begin clarifying that the ICO is a public bank, attached to the Ministry of Economy and Business, whose main function is to promote economic activities that contribute to the growth and development of the country, through the development or creation of companies. For the distribution of its products, the ICO acts in collaboration with the Credit Institutions adhered to each of the lines of credit that are offered. In this way, the ICO contributes the funds or total economic endowment, the basic characteristics and conditions of financing and it subscribes pacts with the banks so that they are the ones that grant the credits. The entities, on the other hand, assume the risk of default, which is why they will analyze the viability of the operation and determine the requirements of the credits and the guarantees of payment demanded. The credits offered by ICO will allow us to finance investment projects as well as to guarantee liquidity as we Are self-employed or a company. Credit institutions respond to ICO for the return of the financing granted, as well as the ICO will respond to the entity in terms of the obligations established in the Covenant. In Addition, it is important to note that the three lines of credit are compatible with grants received from the Autonomous Communities or other institutions, and that transactions with Credit institutions can be formalized throughout the year 2019 For 2019 are established The following lines: ICO COMPANIES And ENTREPRENEURS: Financing oriented to self-employed and companies that make productive investments in the national territory and/or need to meet their liquidity needs. The processing of these transactions is done through the Credit Institutions. The maximum amount is 12.5 million euros (in one or more operations). The amortization period is from 1 to 20 years and, according to this one, periods of lack of up to 3 years. To know the financing concepts, the interests and many other details you can access to the following link. ICO GUARANTEE SGR (Reciprocal Guarantee Companies)/SAECA (State Limited Company of Agrarian Surety): Financing oriented to freelancers and companies that have the endorsement of a SGR or SAECA and that make investments in Spain regardless of their domicile Fiscal/social or the nationality of its capital If the investment is to be made outside the national territory, in addition to the endorsement of the SGR or SAECA, must comply that is domiciled in Spain or be, at least 30%, Spanish capital. The SGR or SAECA may guarantee up to 100% of the amount of the transaction. The processing of the transactions is carried out through the Financial Institutions of Credit. The amount to be financed will be up to 2 million euros (in one or more operations) and may be formalized in The form of a loan or leasing. Amortization periods range from 1 to 15 years and, depending on this period, there may be a shortage of up to 3 years. With Regard to interest rates, commissions or other expenses that can be applied by different contributors, as well as other details you can see them in the following link. ICO COMMERCIAL CREDIT: Financing oriented to autonomous and companies with registered office in Spain that wish to obtain liquidity by means of:

  • The advance of the amount of invoices coming from their commercial activity within the national territory
  • Pre-financing: covering the previous costs of production and processing of the goods sold in Spain.

As in the other two ICO lines, the financing is made through the Financial Institutions of Credit. The Maximum capital granted is up to 12.5 million euros of Living Balance per customer and year, in one or more operations. The interest rate is variable. All the data on commissions, Amortizations… On the following link. One more week, we hope we have helped you in understanding this kind of funding. All the details on the following LINK or on the toll-free phone 900 121 121

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