ICO line of guarantees for economic sectors affected by Covid-19. RDL 8/2020, of the 17th of March

The ICO launches this line of guarantees, following the provisions of RD 8/2020 of March 17, in order to facilitate the maintenance of employment and mitigate the economic effects of COVID-19, aiming to cover new loans and other forms of financing and renewals granted by financial entities.

1.- Who can request it?

Companies and self-employers will have access to these guarantees through their financial entities, by formalising new financing operations or renewing existing ones.

2.- What can we finance with this line?

· Salary payments

· Bills

· Need for currency

· Other liquidity needs, including those derived from maturities of financial or tax obligations.

3.- What is the maximum amount per company that can be guaranteed?

Depending on the applicable regime in accordance with European Union regulations:

· For loans or renewals of up to a maximum of 1.5 million euros in one or more loan operations to self-employed workers and companies, the specific provisions of Commission Regulation (EU) No. 1407/2013 of December 18 will apply. of 2013, regarding the application of articles 107 and 108 of the Treaty on the Functioning of the European Union to minimis aid, when applicable

In this case, the principal of the loan operation or other financing modalities according to the applicable de minimis regime, up to a maximum of € 1,500,000.

· For loans above 1.5 million euros, or when the de minimis regime is not applicable, up to the maximum established in the Temporary Framework of State Aid of the European Commission for both self-employed and companies that meet the status of SMEs and for companies that do not meet SME status.

The limits that the EU establishes on the amount of the operation, according to the Temporary Aid Framework, for operations maturing after 31.12.2020 are:

• Double the wage bill in 2019, (including social security contributions and the cost of the personnel of the subcontractors performed at the headquarters).
• 25% of 2019 turnover.
• Liquidity needs duly justified and certified for the next:
  • SME 18 months.
  • No SME 12 months.
• Properly justified conditional superior exceptions.

4.- What time limits has the guarantee?

The term of the guarantee issued will coincide with the term of the operation, up to a maximum of 5 years.

5.- What is the maximum coverage percentage of the guarantee?

· In the case of self-employed and SMEs, the guarantee will guarantee 80% of the principal of new financing operations and renewals.

· For the rest of the companies, which are not considered SMEs, the guarantee will cover 70% in the case of new loan operations and 60% for renewals.

6.- What is the cost of the guarantee?

The financial institution has the obligation to guarantee that the costs of new operations and renewals that benefit from these guarantees will remain in line with the costs charged before the start of the COVID-19 crisis, taking into account the public guarantee of the guarantee and its cost of coverage.

7.- Where can I apply?

The self-employed and companies interested in availing themselves of this line should contact any of the credit institutions, credit financial establishments, payment institutions or electronic money institutions that sign the corresponding framework contracts with the Official Credit Institute to participate in the Guarantee Line.

8.- What operations can be guaranteed?

New loans and other forms of financing and renewals of operations granted to self-employed workers and companies from all sectors of activity that have their registered office in Spain and that have been affected by the economic effects of COVID-19 provided that the loans and operations have has been formalised or renewed from the 18^th of March 2020.

9.- Until when can you request it?

Financial institutions can request the guarantee for loans and operations subscribed with self-employed and companies formalised or renewed from the 18^th of March 2020 to the 30^th of September 2020.

The term may be extended, always in line with the EU State Aid regulations, by Agreement of the Council of Ministers.

10.- What requirements must be fulfilled?

The requirements that companies and self-employed must meet are:

• Do not appear delinquent in the consultation of the files of the Bank of Spain's Risk Information Centre (CIRBE) as of the 31^st of December 2019.
• They are not subject to insolvency proceedings as of the 17^th of March 2020, either because they have filed for bankruptcy, or because of the circumstances referred to in Article 2.4 of Law 22/2003, of July 9, so that the bankruptcy is requested by your creditors.
• When the Temporary Aid Framework of the European Union is applicable, it is not in a crisis situation as of 31.12.2019, in accordance with the criteria established in Article 2 (18) of Commission Regulation No. 651/2018, of the 17^th of June 2014, declaring certain categories of aid compatible with the internal market.
• The guaranteed financing cannot be applied to the cancellation or early amortisation of pre-existing debts.