Companies affected by the war in Ukraine await new ICO guarantees

Banks have already started adhering to the new guarantees from the Official Credit Institute (ICO) established in Royal Decree-Law 6/2022 of 29 March, which provides for urgent measures within the framework of the National Plan to respond to the economic and social consequences of the war in Ukraine. However, the government has not taken all the necessary steps to make this financial support available to businesses as of yet.

With the end of the bankruptcy moratorium on 30 June and the expiry of the grace period for ICO loans, a period of new financial difficulties is opening up for many companies suffering from a lack of solvency. Therefore, these guarantees can be of great help to companies that have suffered the economic repercussions of the war in Ukraine. Unfortunately, the slot of the public administration is delaying its implementation.

These new guarantees comprise 10 billion euros and the first tranche of 5 billion euros has already been released and will be managed by the ICO. The aid is targeted at the self-employed and businesses in all sectors affected by the economic repercussions of the war in Ukraine with the sole exception of the financial and insurance sectors. The amount may be used for investments, working capital requirements, and new financing operations granted by banks, but it may not be used for refinancing or debt restructuring.

These new guarantees don’t take into account whether the company has already taken out other ICO loans. Loans can be taken out for up to 10 years, including grace periods for repayment, if necessary.

This financing is guaranteed by the State (70% or 80%), so the interest rates are very low depending on the amount requested.

The amount guaranteed by the State is generally up to €400,000, which means that the self-employed and SMEs (as long as they do not have a stake and aren’t more than 25% owned by other companies) can apply for loans of up to €500,000. The amount may be higher, provided that it doesn’t exceed the greater of 15% of the average annual turnover of the last 3 completed fiscal years or 50% of the energy costs of the last 12 months since applying for financing.

The deadline for applying for these guarantees is 1 December 2022. Kaizen Consulting can advise you on how to apply for and manage these ICO guarantees. We recommend you contact our team of experts, so they can analyse your case and advise you on your specific financing options.

Comparte este artículo