Companies with debts refused ICO credits.

Companies with debts refused ICO credits.

28-04-2020Ultima Hora

Balearic companies that have financial problems because of the coronavirus crisis are being denied access the ICO credits approved by the Central Government, according to the employers CAEB and PIMEM.

The Spanish Banking Association, or AEB, said the priority for banks is to channel liquidity and financing to companies that are solvent and that they process "as quickly as possible the loans linked to the guarantees of the ICO.”

“In other European Union countries the credit scenario is not as harmful for companies, as it is in Spain,” says Carmen Planas, President of the CAEB.

The President of the Employer's Industry Commission, Jaime Fornés, acknowledges that there are double standards.

"Companies that don’t have debts or treasury problems have no problem accessing ICO credits, which are 80% guaranteed by the State,” he said, “but companies with debts are being pressured by banks to present all kinds of guarantees and even to pledge assets and if a loan is granted, they have to pay a much higher annual interest rate, sometimes more than double the stipulated one 1.5%.”

Sectors

Companies from all Productive Sectors of the Islands say they are being deprived liquidity and PIMEM warns that the situation will get much worse if banks don’t do something in the coming months, because the summer tourist season is a total washout and companies have zero income.

“The demise of Thomas Cook last year affected many companies in the Balearic Islands and their lack of solvency now is preventing them from accessing loans guaranteed by the Central Government, financial institutions are covering their backs to prevent their default rates from increasing due to bankruptcies,” said Fornes

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