STAFF REPORTER
PALMA

THE Balearic government will be making lines of credit available to small businesses to a total tune of at least 200 million euros, regional Finance Minister Carles Manera said yesterday, adding that “depending on circumstances,” the ceiling may be raised to 300 million euros. The loans which are strictly short-term, will need to be repaid within a year.

The move is one which has already been made, Manera confirmed, by other regions of Spain including the Basque Country, Catalonia and Valencia.
Speaking after a government meeting yesterday, Manera said that the minimum loan to be considered will be 1'000 euros and the maximum 2 million. Applications, he said, can either be made individually or in group representation. The loan will entail a fixed interest rate of 4.7630 percent for a period of 366 days.

The loans are aimed at small businesses who need finance to expand and those who have been refused financing by the main banks which have become increasingly unwilling to lend as a result of the economic crisis. The government loans are not open to investment companies or credit organisations - except those who are administering the credit facilities to applicants - insurance or pension companies, etcetera.

Those who wish to apply for loans can do so from 9am on 24th January to 2pm on 4th February. La Caixa banking organisation will be in charge of managing the loan application and insuring the loans but paperwork can be processed through Sa Nostra, Banca March, Deutsche Bank and Banco Sabadell.

Loans will be granted on 14th February for a year after which a single interest payment by the borrower will be made. Manera said that the government loans respond specifically to the needs of small businesses as banks and financial organisations had reported many applications for funding. “The loans are an answer to the needs of most businesses on the island,” said the Minister. “It's a difficult moment for people to get credit,” he added.

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