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The Council of Ministers has approved to guarantee up to 80% of the new loans that the bank grants to SMEs and the self-employed affected by the coronavirus for an amount, in principle, of 10,000 million euros.
With this measure, the Government trusts that financial institutions will open the credit tap to companies with liquidity problems and avoid a wave of bankruptcies in the coming weeks.
For large companies, the plan establishes guarantees of 70% on new credit and 60% on renewals, but leaves out the refinancing of current loans. In this first package, these companies will be able to access a credit line of 10,000 million euros.
The first tranche of the program limits its capacity to a fifth of what was promised by the government a week ago, the amount of which amounted to 100,000 million euros.
Economy and banks have negotiated in recent days the scope of these guarantees. The entities asked that in the case of SMEs they reach 90% given the high risk of bankruptcy of those exposed to sectors such as commerce or tourism, whose activity has been reduced to zero.
From the Administration, however, they replied that with such high guarantees, mismanagement of credit could occur, which would eventually become the future execution of the guarantees and the increase in public spending.
In any case, the Minister of Finance and Executive Spokesperson, María Jesús Montero, explained that as soon as the first tranche of the 20,000 million euros is exhausted, another part of the package will be released and the conditions of the guarantees based on the demand there is.
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