The Government launches the Guarantee Line to guarantee the liquidity of self-employed workers and companies and alleviate the economic effects of the war

The Council of Ministers today approved the Agreement setting out the characteristics of the first section of the Guarantee Line for self-employed workers and companies, amounting to up to EUR 5 000 million, which forms part of the measures included in the Plan of Response to the Russian War in Ukraine approved in Royal Decree-Law 6/2022.

The new line will strengthen the liquidity of self-employed and companies that are being affected by the increase in the prices of energy, raw materials or electricity as a result of the war, thus guaranteeing their access to liquidity. This Guarantee Line is part of the new temporary framework of aid approved by the European Commission, aimed at supporting the productive fabric and the European economy in the face of the economic effects of the Russian invasion of Ukraine.

The first approved tranche of 5 billion euros, which will be managed by the Official Credit Institute in collaboration with the Financial Institutions, is aimed at all self-employed and companies in all economic sectors affected by the economic effects of the Russian war in Ukraine, with the exception of the financial and insurance sector.

The guarantees will be used to guarantee new financing operations granted by the Financial Institutions, and may be requested until 1 December 2022 by self-employed persons and companies that are not in a situation of delinquency or in insolvency proceedings at the date of signature of the operation, are not subject to sanctions by the European Union, nor have at the time of application for the guarantee any process of execution of guarantees managed by the Financial Institutions. ICO.

The guarantee will guarantee up to 80% of the new loans for operations requested with a maximum guaranteed amount of up to 400,000 euros in general, or 35,000 euros for companies in the primary sector, aquaculture or fisheries, in one or several loan operations. In these cases, the guarantee issued will be valid equal to the term of the loan granted, with a maximum term of 10 years.

For loans of a higher volume, the guarantee may guarantee up to 80% of the loan amount for SMEs and the self-employed and up to 70% for other companies, although the total amount of the loan may not be more than 15% of the beneficiary’s total average annual turnover during the last three years, or 50% of the energy costs in the twelve months prior to the loan application.

For these loans, the guarantee will also coincide with the amortization period of the operation, which will be up to eight years.

All transactions will have, at the request of the debtor, an initial period of absence of the principal of 12 months and the financial institutions must keep the lines of circulation of their customers open until December 31, 2022. Likewise, Financial Institutions must apply the best banking practices and practices for the benefit of their clients and may not condition the approval of the loans to the contracting by the client of any other service or product.