Diversifying Funding Sources for Companies: Importance of Public Sector Support

The gradual tightening of interest rates by the ECB has led to a slight slowdown in the demand for credit by companies. This slowdown has not been fed back, for the moment, by a tightening of the criteria for granting credit, according to the latest survey of bank loans from the ECB. However, in this context, this greater discrimination by entities is not a scenario that should be ruled out. Hence the importance of influencing the benefits of diversifying the financing structure of companies, both in products and in institutions. Capital markets and private equity funds have developed a lot in the last decade. Now, in a more uncertain environment since 2020 and with large amounts of European resources mobilized, the public sector is a long-term partner to be incorporated into companies’ fundraising strategies.

The support traditionally exercised by the ICO and by Cofides has been reinforced, in their respective fields, by new alternatives adapted to the current situation and to the different types of companies. Likewise, both entities play an important role as “anchor investor” that helps to mobilize private agents, causing a multiplier effect of capital. The Productive Industrial Investment Support Fund (FAIIP), launched in 2021 and managed by Sepides, also stands out for its scope (10 years) and endowment (around 600 million per year). This fund has the objective of boosting investment and favoring the development and competitiveness of the industrial sector with actions in national territory. The loan amounts offered, as well as the grace and maturity periods of the operations are the main attraction of this fund.

For their part, the 17 autonomous communities have different financing and support programs active. These actions are carried out through its development agencies, financial institutions and mutual guarantee societies, among others. The objective actions are more finalist, since the regional governments seek to impact their sphere of influence.

The challenge for the company is to identify these sources, both in terms of their characteristics and their suitability for the pursued strategy. The advantages mentioned are counterposed by some risks, among them, the pace of execution of the operations. For this reason, it is essential to have precise communication channels between the public sector and the company, with adequate advice that allows efficient access to said instruments and, especially, with agile resolution procedures that guarantee the success in the mobilization of the money. It is a figure that can substantially strengthen the investment processes of companies in a more challenging environment, a critical element to preserve the potential for growth and job creation.

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