ICO loans: extension of maturity and grace period
Until 15 May 2021, companies and the self-employed who applied for an ICO loan under Royal Decree-Law 8/2020 of 17 March 2020 may request an extension of the term of the loan and/or the grace period
Last November 2020, the Council of Ministers approved a series of measures aimed at mitigating the possible cash flow tensions of companies and the self-employed caused by this year-long health crisis and its effects on the economy. Among these measures was the possibility of requesting an extension of the maturity of ICO loans, as well as a grace period for operations signed before 18 November 2020.
As stated in Royal Decree-Law 34/2020 of 17 November, entrepreneurs and the self-employed who signed an ICO loan last year will have the possibility of requesting an extension of the maturity of said loan for a maximum period of 3 years (provided that the total guaranteed operation does not exceed 8 years), and also the extension of the grace period in the repayment of the principal up to a maximum of twelve additional months. (up to a maximum total grace period of 24 months).
The requirements to be met to apply for these extensions are as follows:
- The guaranteed financing operation is not in arrears (unpaid for more than 90 days), nor is any of the other financing granted by the entity to the same customer.
- Not to be in arrears in the Bank of Spain’s Central Credit Register (CIRBE) on the date of formalisation of the extension.
- That the financial institution has not notified the entity granting the guarantee of any non-payment of the guaranteed operation with the debtor on the date the extension is formalised.
- That the debtor is not subject to bankruptcy proceedings.
- The guaranteed financing for which the extension of instalments or grace period is requested must have been formalised before 18 November 2020.
- The debtor must comply, in order to request the extension of the guarantee, with the limits established in the European Union’s State Aid regulations.
Finally, remember that to make the request you must contact the financial institution with which the loan guaranteed by the ICO was formalised, before 15 May 2021; and the financial institution must resolve the request within a maximum period of 30 days, and may not condition the modification of the conditions of the ICO loan to the contracting of any other product of the institution.
