The Government has approved a royal decree of measures that extends the maturities of ICO loans five to eight years, three more than the five initially planned, in addition to extending the guarantee application period until June 30, 2021 and the grace period up to 24 months.
These measures are applicable to both the main line of financing of 100,000 million euros as after 40,000 million, which in both cases are extended until June 30, 2021.
In the press conference after the Council of Ministers, the Third Vice President of the Government and Minister of Economic Affairs and Digital Transformation, Nadia Calviño, explained what these measures to support business solvency and in tax matters consist of to deal with the ravages of COVID-19.
What it is about, Calviño explained, is reinforce the “safety net” to preserve the productive fabric in the coming months.
Taking advantage of these extensions depends in all cases on the will of the company, and in no case is it mandatory.
Among the conditions that the debtor must meet in order to benefit from thee cannot be in default or have reported any breach of its guaranteed operations.
If the requirements are met, the State will extend the term of the guarantees, the processing of which must be as easy as possible without the financial institution granting the loan being able to condition it to the contracting of additional products or an increase in cost that is not justified.
Likewise, those who so wish may extend their grace period for an additional 12 months to a maximum of 24, a decision that is also part of the debtor and with the same conditions, not to be in bankruptcy or in default.
Financial entities are obliged to extend the maturities as long as the conditions are met.
The decree also establishes deductions of 50% in the costs of fees or notarial expenses, which correspond to the bank but with deductions, and which will have a more favorable treatment in novations and loans.
The ICO will have from now on access to the information collected by the risk information center of the Bank of Spain (CIRBE), a space where information is shared by credit institutions, and which the ICO did not monitor below 50 million euros.
The point is that the body may have information on SMEs or freelancers who may fail to comply with the guarantee, always to facilitate recovery processes and to carry out its own risk analysis.
Near 550,000 companies now benefit from these programs of loans, and from now on the ICO will be able to have information on guaranteed clients, on which the banks provide information.
The meaning of this measure is that if there is a default, the bank will resort to the ICO to cover the guaranteed part, and the ICO in turn will start a recovery process with the support of the bank, hence the It is important that you know the client’s situation, and see if you can cope with your responsibilities.
More than 30% of the loans guaranteed by the ICO have a repayment term of less than 4 years, which now, as long as the company’s situation allows it, can be extended for up to 3 more years.
ICO guarantees played a key role in providing liquidity to the business fabric after the outbreak of the pandemic and until yesterday they had served to grant 881,000 loans, 98% of them to SMEs and the self-employed.
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