Although initially the companies considered the fact that Economía had agreed to extend the repayment terms of the loans backed by the ICO and the grace period as good news, the companies have been somewhat disappointed.
The decision approved in November by the Executive that the terms to pay the loans with the State guarantee would be extended from a maximum of five years to eight years, and in one more year the grace period, supposed a balloon of oxygen for several companies that, being viable, needed more time to pay off their loans given the current economic situation.
The paralysis of certain sector activities, together with the unpredictable third wave of the coronavirus, made many companies reflect, which considered that, due to the depletion of their liquidity, or for prevention, it was better to extend the repayment terms of their ICO credits.
But once they have begun to negotiate with their bank the extension of the payment period they have found a surprise that not everyone had taken into account: the interest rate that will be applied from now on will be, in several cases, higher , even more than one percentage point to what they had in their contract so far.
At the beginning of this month of February, the entities have begun to send the documentation to be able to manage the processing of the increase in the grace period and the increase in the repayment period by three more years in ICO loans. And as interpreted by several lawyers and businessmen from the reading of Royal Decree 11/2020, there were not going to be any increases in the interest rate in the operations to be processed. But the reality has been different, as they have explained to this newspaper,.
Banks have raised the initial prices of the contract with increases in commissions and the interest rate on operations.
“In some cases the increases are even higher than one point and go from 1.60% of the interest that appears in the current contract to a rate of 2.90% applicable to loans that go from five years to eight in their repayment term ”Explains a law firm specialized in the financial sector, which has processed several tens of millions in ICO credits since March last year.
“We understood that the modification of the contract had a commission attached, but not an increase in the interest rate,” says another source from a medium-sized company.
The ICO explains that the increases in financing prices are in line with current regulations, according to the consultations made.
If the ICO operations signed by the company exceed 800,000 euros [tope que la Comisión Europea considera que no es ayuda pública y, por lo tanto, no necesita autorización expresa], a commission is applied in addition to an interest rate increase, the Official Credit Institute has responded to a query made by the firm JH Asesores Financieros.
The public institution chaired by José Carlos García de Quevedo adds that “if the ICO operations signed by the company are less than 800,000 euros, it will have no cost”, to which it adds that “if the company requests only a 12-month increase in lack, it will have no cost ”.
The bank explains that the only thing it does is pass on to the client the cost that the ICO raises for the guarantees, which have a price depending on the repayment period, and according to scales set by the public body, although some companies claim that the price claimed is higher than the percentage that the ICO claims from the entities for this extension of the term.
The banks affirm that they must increase costs because by lengthening the term if this cost is not charged, the credit would enter into losses.
Almost all entities have decided to pass on the cost imposed by the ICO to a greater or lesser extent, although there are some banks that have chosen to impose a commission instead of raising the interest rate, according to the sources consulted by this newspaper.
The ICO credit line opened in March by the Government for 100,000 million euros is guaranteed by the State between 70% and 80%, depending on whether the loan is aimed at a large company or SMEs or self-employed. Although the majority of this line has been hired by SMEs and the self-employed due to the lack of liquidity they support due to the current economic situation, as a consequence of the pandemic.
The ICO loans have provided financing for 114,647 million euros, through 944,588 loans guaranteed with guarantees of 87,085.8 million euros, which have been granted to almost 600,000 freelancers and micro-SMEs, the vast majority.
Moratoriums for 54,000 million euros
Spanish banks had granted 1.38 million moratoriums on mortgage and consumer loans to their customers at the end of January, with a total balance pending amortization that exceeds 54,000 million euros, according to data updated this Monday by the Bank of Spain. These figures include both the legislative moratoriums, that is, those of those affected by the coronavirus crisis who met the requirements set by the Government, as well as the sectoral moratoriums in which the banks themselves relaxed the criteria with the idea that more people could benefit.
In the case of the legislative measure to get rid of the payment of mortgages, at the end of January the entities had granted 221,932 moratoriums, 84.9% of the 261,370 requested, with an outstanding balance of 19,955 million.
These moratoriums could initially be requested until the end of September, but now the Government has opened a new window so that this aid measure can be requested until the end of March.
On the other hand, they had received 411,015 requests for legislative moratoriums on consumer loans and they had been granted to 362,007 people, 88.1%, with an outstanding balance of 2,679 million. To these legislative moratoriums must be added the sectoral moratoriums, agreed by the entities, and which amounted to 820,551, of which 796,125 had been granted at the end of January, 97%, with a total of 31,480 million pending amortization.
For the three types of moratorium, the vast majority of beneficiary debtors and guarantors (above 70%) are salaried. Regarding self-employed workers, the breakdown by activity branch again shows that, for the three types of moratorium, the main beneficiary sectors are commerce, hotels and other services, followed at a certain distance by professional, scientific and technical activities, transport and building. Together, these sectors represent almost 80% of moratoriums for the self-employed that have been implemented to date, explains the Bank of Spain.
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