How ICO loans work

Financing for the self-employed and businesses, with competitive interest rates and a term of up to 20 years.

The way that an ICO loan works is not very different from the way that a ‘traditional’ bank loan does. However, unlike these, this way of financing involves to three parts: 

  • The Credit institute Officiatesl, which provides the money and puts the conditions for access he.
  • The credit institution, that analyzes the feasibility of the loan, manages the money lent and assumes the risk in the event of nonpayment of the customer
  • The applicant (SME, self-employed worker or, even, a public authority), which has to return it within time stipulated, together with the interest partner.

Is, to sum up, a system of mediation so that SMEs, self-employed workers and companies with central office in Spain access a series of lines of funding with which alleviate your lack of liquidity. Especially for those businesses that have seen affected by the pandemic of the COVID-19, which already arrange in BBVA of the loans linked to the Lines of Guarantee ICO, on the basis of what was regulated in the item 29 of the Actual one decree-law 8/2020, of March 17. A total of 20,000 million euros that constitute the first stretch of endorsements awarded for the Ministry of Economic Affairs and Transformation Digital, after your approval of emergency the March 24. Want know how access they? Have all the information here.

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ICO loan types

There are currently five of these lines:

  • ICO Business and Entrepreneurs: designed primarily for the self-employed and companies that need liquidity or want to invest in their production capacity inside of Spain. This line also includes financing for public entities and homeowner associations.
  • ICO RGC/SAECA Guarantees: a line designed for the self-employed, businesses, and public or private entities that have a guarantee from a Reciprocal Guarantee Company (RGC in Spanish) or from Spain's National Agricultural Security Corporation (SAECA in Spanish).
  • ICO Commercial Credit: Designed for the self-employed and companies that need access to liquidity by means of an advance on their accounts receivable.
  • ICO Exporters: focused on the self-employed and companies that need access to liquidity by means of an advance against payment of invoices from their exporting activities, or to finance the up-front production costs for their goods or services destined for foreign markets.
  • ICO International: This line has two modalities: one for the self-employed, companies, and public or private entities that need liquidity or want to invest; and another for Spanish or foreign companies that want to finance their buying/selling of goods or services.

These financing tools are intended to promote the creation of new companies that will do business both within Spain and in foreign countries. Some examples of projects eligible for ICO financing include:

  • Acquisition of private vehicles with a cost that does not exceed €30,000.
  • Provision of up to 100% of the liquidity needed to cover current expenses.
  • Advances against payment of invoices coming due in not more than 180 days.
  • Acquisition of companies.
  • Creation of companies abroad.
  • Covering the costs of producing or providing goods or services for export.
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Financing limits and terms and conditions for ICO loans

The maximum financing option available and its repayment terms will vary depending upon the line selected. As general rule, the maximum amount loaned by the ICO is 12.5 million euros, with a maximum repayment period of 20 years. However, most of the loans extended are for 25,000 euros or less, and are granted to small-medium businesses and microenterprises.

As far as the interest associated with these loans, there may be a fixed rate with payment every two weeks, or there may be a variable rate: this consists of the 6-month Euribor plus a margin.

  • In loans at one year, it will be up to 2.3%.
  • In loans at two to three years, it will be 4%.
  • In loans at 4 years and more, it will be 4.3%.

These ICO loans do not have opening fees or study fees, but there is a fee charged for early repayment.

The repayment period can be from 1 to 10 years or 12, 15, or 20 years, with up to 2 years of deferment when the financing is for investment or for investment and liquidity. This is reduced 1 to 4 years with up to 1 year of deferment if the financing is only for liquidity.

How to apply for an ICO loan

To apply for an ICO loan, the applicant must go to a branch of the credit institutions that subscribe to this financing system, including BBVA, and submit a proposal that must focus, mainly, on these two keys points:

  • Who is requesting the financing and for what purpose.
  • Ability to repay, material solvency, and additional guarantees, which includes the possibility of a guarantor. As with any other request to borrow money, this is one of the most important aspects when it comes to obtaining financing.

For obtain more information on the ICO loans can:

  • If are customer, contacts your manager or your specialist SMEs.
  • If not are customer, can come to one of the offices that are open currently.

Have to your willingness the next telephones:

  • For autonomos and SMEs: 91 298 35 96
  • BEC: 91 296 70 70
  • Companies with a turnover of less than €5 million: 91 298 35 96
  • Companies with a turnover of over €5 million: 91 296 70 70
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