The €11 billion plan approved by the Government to support corporate solvency complements the €140 billion in ICO guarantees and the €10 billion allocated by SEPI for strategic companies. How can businesses access these grants? At Kaizen Consulting, we provide advisory services to help you benefit from these opportunities, assist with all the necessary procedures, and support you throughout the process.
This new plan aims to support viable companies that were impacted by significant sales declines during the pandemic. It is not intended as a bailout for companies that were unviable before the pandemic or those unlikely to be viable afterward due to their business models.
At Kaizen Consulting, we are specialists in advisory services and can help your company access the government-approved grants. As recently noted by José Ignacio Goirigolzarri, President of Bankia, European funds represent a significant opportunity for company transformation. These grants will be tied to specific projects and will require financing. Financing solutions are Kaizen Consulting’s specialty, and we offer various alternatives and support to help companies advance their projects.
These grants are distributed across three funds:
1. €7 Billion in Direct Aid to Businesses and Self-Employed Individuals
– Eligible for businesses that experienced a decline of more than 30% in 2020. The funds are intended for debt repayment and paying suppliers, with a focus on reducing ICO debt, provided these obligations were incurred between March 1, 2020, and May 31, 2021. Distribution will follow REACT EU criteria. Companies with losses in 2019 will not be eligible.
– The regional governments will handle processing, management, and resolution of applications, payments, and pre- and post-payment controls.
– Maximums:
– For Professionals: €3,000
– For Businesses: (grants always above €400,000 and below €200,000)
– Fewer than 10 employees: 40% of the excess over the 30% sales decline from 2020/2019.
– More than 10 employees: 20% of the excess over the 30% sales decline from 2020/2019.
2. €3 Billion for Refinancing Guaranteed Debt
– Three levels:
– Extension of ICO loans
– Conversion of ICO loans into participative loans with public guarantees (equivalent to equity)
– Ultimately, transfers to reduce bank and supplier debt, with amounts paid by banks.
3. €1 Billion in the Recapitalization Fund for Companies Affected by COVID
– For viable companies before COVID that are facing difficulties now and are not large enough to access the SEPI fund.
– Managed through Cofides (a public-private limited company).
– Provided as debt, equity, hybrid instruments, or a combination. Includes state participation in future profits. Exit within a maximum of 8 years.
– A Technical Investment Committee (under the Ministry of Industry) will approve operations presented by Cofides. Cofides may hire external support services as needed according to procurement regulations.
– In case of equity participation, Cofides may be involved in appointing company executives. No obligation to make a public takeover bid.
– SEPI will direct Cofides to those companies that sought assistance from SEPI but did not meet its requirements.
We recommend that companies contact us for tailored advice. We will analyze your specific case and guide you on how to access these grants.
