We have to remember. A large part of Spanish companies, due to the period of confinement generated by the Covid-19 pandemic, in which sales were paralyzed, which fully affected their treasury since March 2020, were in need of sign an ICO loan with your financial institutions in order to inject liquidity and continue operating in the market.
Not only was an operation signed, different operations were signed with the banks, because after the period of confinement, the situation was not the same again: contraction of consumption, decrease in sales, returns, defaults, global economic crisis …
These ICO operations were formalized for a term of five years, including a grace period of twelve months. Months passed and companies hoped to recover the sales of that period, in order to minimize accumulated losses. But it was not so. The harsh reality is that the decline in sales was continued, ranging from 30% to 50%.
This situation alarmed companies, because it made it impossible for them to meet the ICO Loan installments, after the end of the grace period. Due to this agony, the Government of Spain was constantly asked to increase the waiting period and repayment period, which would allow them an oxygen balloon to continue operating.
After a long period of negotiations, this modification was achieved. On November 24, 2020, the Council of Ministers approved, via Royal Decree (RD), the extension of the term for repayment of loans that companies and freelancers had signed with financial institutions and the ICO (Credit Institute) Guarantee. Officer), during the exercise.
In this RD, it was authorized to extend the repayment term of ICO loans by three years, in which the grace period went from 12 to 24 months, and the repayment term of the loan, from 4 to 6 years, for a maximum 8 years.
In this approval, it was stipulated that banks should respond to extension requests within a maximum period of 30 days, maintaining the same interest rate, and not requiring the contracting of linked products. Also, applicants may not have positions in arrears in CIRBE, or be in a situation of bankruptcy.
Precisely, after the approval of this RD, a large part of the companies and offices sent a letter to the financial entities making this request. To our surprise, the response from financial institutions to our requests has been the following:
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“We acknowledge receipt of the letter sent and confirm that we are waiting for our entity to enable us the financial product that suits your request and proceed to modify the conditions as they are indicating to us.”
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“We do not have these options enabled yet. As soon as we can manage it, we will get in touch ”.
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“The entity is still analyzing how to proceed with the novations. As soon as they give us directions, we proceed ”.
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“We are working on the process of formalizing the deficiencies and extensions of the term of the ICO operations formalized before the entry into force of the RD. Given the changes required by the ICO, it will be possible for us to formalize these novations until the end of January ”.
From what they have been able to read, the banks are still not clear about it and the days continue to pass. By the way, if we do the math, I think the 30-day period indicated in the royal decree has already passed … Everything remains the same.
I interpret that financial institutions are still negotiating the conditions with the ICO, but also adapting their systems to make changes to these loans that are already in force, because it is not so simple.
Probably, in order not to lose the age of the policy and the guarantee, an annex will be signed with the modification in the term and with a new amortization table. The ideal would be to sign as soon as possible for the peace of mind of the entrepreneurs, who daily ask the same question: When is it signed? It is the question that we all ask ourselves, since March is just around the corner.
I would not like to end without recalling the delicate economic situation we are going through and in which the injection of liquidity by the Government of Spain to companies is necessary. I do not know what we are waiting for to imitate the rest of the models from European countries, but, from what you can see, Spain is different.
Indicate that this crisis generated by the coronavirus has caused the world’s greatest economic disaster in times of peace, which has hit Spain fully, and in which the health emergency has given way to an economic and social crisis of an unprecedented magnitude, at least, since the Civil War.
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