ICO rules out that demand for loans from European funds is delayed due to rates

Activation of the second phase of the Recovery, Transformation and Resilience Plan associated with the addition will enable SMEs and micro-enterprises gain access to loans totaling EUR 30,150 million to finance projects related to the energy transition and the fight against climate change (ICO green line, endowed with 22 billion), on the one hand, and investments in business structure, digitalization and artificial intelligence, on the other. The latter through a line of ICO companies and entrepreneurs numbering over 8,000 million people. Of this total, more than 21 billion will be distributed through financial institutions and private wealth managers.

Official Credit Institute sources rule out that demand for these loans may be delayed as families and businesses wait for interest rates to continue to fall and financing conditions generally improve. These costs remain at their highest levels since the financial crisis following the first rate cut announced by the European Central Bank (ECB) earlier this month.

A loan that the organization will send through a bank It will be 7-8% cheaper than other financing. offered by institutions, thanks to the fact that the European Commission will first receive it at a lower price (20-35 basis points less), since the ICO is going to set maximum annual interest rates for financial institutions on said loans.

The Minister of Economy, Trade and Business, Carlos Bodi, was responsible for signing on Monday an agreement with the ICO and its venture capital company Axis to activate the ICO Verde and ICO Empresas y Emprendedores funds, two lines that are added to the Autonomous Sustainability Fund signed last week with the European Investment Bank (EIB), which mobilizes another 20 billion in loans to finance public and private projects territories in areas such as social and affordable housing and urban regeneration, sustainable transport, R&D, sustainable tourism or the care economy and others.

To channel the first two funds, the organization plans to use four tools: Mediation Lines, direct ICO financing, bond purchases and capital investments. Subjects will participate through mediation lines.which they will offer in their branch network.

They will finance up to 100% of the project.

These will be loans up to 100% of the project amount financed on more favorable terms and with repayment terms that can reach twenty years, including grace periods. Meanwhile, through Axis, private wealth managers will make both fund investments and direct co-investments with resources from both streams, with an eye on projects with a high innovation component and supporting the growth of national startups.

This method will make it possible to invest approximately 4,500 million euros in the business structure, which, together with the participation of private investors, will be able to mobilize more than 9,000 million euros. The ICO will also offer direct financing programs aimed at larger projects with a noticeable tractor effect and through the acquisition of debt that Spanish companies issue on regulated markets.

The same sources explain that the loans can be issued until August 2026, although there is a possibility that the organization will continue to use the resulting depreciation charges to finance new operations over the next decade, until 2036.

The implementation of these funds involves simplifying the processes for issuing these loans, for example, through responsible declarations. The Institute also explains that if an investment project received a subsidy in the first phase of the Recovery Plan, it will not be eligible to receive loans in the second phase for the same concepts.