The changes also include the option of amending transactions already arranged with the ICF, largely to tailor the loan repayment schedule to the company’s cash generation capacity. Up to April this year, 415 transactions had been concluded under this facility worth €382.3 million.
The Institut Català de Finances (ICF) and the Catalan Government have announced changes in the ICF Crèdit Covid-19 financing facility to broaden its purpose and extend the term for working capital loans while also providing the option to amend previously arranged transactions. The changes come in response to the new needs of the business community which has been hard hit by the Covid-19 pandemic and are designed to drive economic recovery.
First rolled out in April 2020, the ICF Crèdit Covid-19 loan facility funded the working capital needs of the self-employed, SMEs and large companies stricken by the health crisis. Now and in addition to this purpose, the loans can also be used to finance investment schemes driving the conversion of Catalan companies and kicking off new initiatives in areas such as sustainability and the environment, innovation and digitalisation.
Generally speaking, investment loans will range from €500,000 to €2.5 million and can be repaid over up to 15 years with the option of an interest-only period of up to two years.
Commitment to long-term financing
Another of the changes that has been signed off is the extension of the term of loans for working capital needs to up to 10 years. Until now, the self-employed and SMEs had to repay their loans in at most five years and large companies in four. An additional year has also been added to the interest-only period which will now be up to two years.
“This change is a shot in the arm for freelancers and firms looking to get their businesses back on the road,” said ICF CEO Víctor Guardiola. “It also underlines our commitment to providing long-term financing for working capital operations, which are normally financed over 5 years, and to stand alongside Catalan companies.”
Besides these changes, the agreement also envisages the option of amending transactions previously arranged with the ICF. The interest-only period can be extended by another year up to at most two years and the term by up to three additional years. There will also be the opportunity to refinance existing loans using this facility.
Loans taken out under this facility whether for investment or working capital are backed by the Ministry of Enterprise and Employment at 80% of the outstanding exposure.
Nearly €400 million concluded under this facility
From when the ICF Crèdit Covid-19 loans were started up to April this year, 415 transactions were concluded worth €382.3 million. This means about 55% of the initial €700 million allocated to the facility has been used. The remainder can be taken out in 2021 in working capital and investment loans.
Businesses can apply in the next days for the loans on the ICF website (www.icf.cat).
About the ICF
The Institut Català de Finances is Catalonia’s public financial institution. Its main mission is to foster funding for the business community in Catalonia in order to support the growth, innovation and sustainability of the Catalan economy. The ICF acts as a complement to the private sector by offering a wide range of financing solutions focusing on loans, guarantees and venture capital. Since 2014 it has been a member of the European Association of Public Banks (EAPB), which brings together most of the public banks and financial institutions operating in Europe.