What is the COVID-19 CESCE Facility?

An insurance cover of up to 2,000 million euros, in two tranches, charged to the Internationalisation Risk Reserve Fund.

The cover will be provided by CESCE in its own name and on behalf of the State, under the provisions of Law 8/2014 of 22 April, Royal Decree 1006/2014 of 5 December and Royal Decree-Law 8/2020 of 17 March.

Companies that meet the eligibility criteria will have access to this cover for working capital loans through financial institutions, including Banco Santander, by arranging new financing operations or renewing existing ones.

The Facility is subject to the European Union's State aid rules.

Which companies is the COVID-19 Working Capital Cover Facility aimed at?

Spanish companies considered to be Small and Medium-sized Enterprises as defined in Annex I of Commission Regulation EU 651/2014, as well as other larger companies, provided they are non-listed entities (neither the debtor company nor its parent company), in which the following circumstances apply:

  • They must be internationalised companies or companies in the process of internationalisation, fulfilling at least one of the following requirements:
  • Companies in which the international business, as reflected in their latest available financial information, represents at least one third (33%) of their turnover.
  • Companies that are regular exporters (those companies that have exported regularly during the last four years regardless of the amount exported).
  • The company is facing a liquidity problem or lack of access to financing as a result of the impact of the COVID-19 crisis on its economic activity.

What is the maximum amount of loans per customer under the facility and the maximum duration1?

  • For a loan valid after 31/12/2020, the principal may not exceed:
  • Twice the Debtor's annual expenditure on staff costs during 2019, or the last year available. For companies created after 1/1/2019, the credit should not exceed the estimated wage cost for the first two years of business; or
  • 25% of the Debtor's total income in 2019; or
  • With the appropriate justification (which may be based on statements by the Debtor) of their liquidity needs, the amount of credit can be increased to cover the needs of the next 18 months for SMEs or 12 months for large companies.
  • For loans to be repaid before 31/12/2020, the principal amount of the loan may exceed that previously received, provided that appropriate justification is given and the proportionality of the aid is maintained.

The maximum term of the loans may be up to 5 years from the date they are provided.

What credit operations are eligible under this Cover Facility?

The working capital credits required by the exporting company will be eligible, without the need for a direct relationship with one or more international contracts, provided that they correspond to new financing needs arising from the COVID-19 health crisis and not to situations prior to the current crisis.

The insured finance may not be used for the cancellation or early repayment of pre-existing debts between the company and the financial institution. The financial institution undertakes to maintain, at least until 30 September 2020 or until the original expiry date if later, the limits of the working capital facilities granted to customers whose loans are covered by this facility.

Cover of working capital loans granted to eligible companies signed after 18 March 2020 may be considered under this facility. The term of this facility, for the purposes of issuing cover, is 6 months from that date, i.e. until 18 September 2020.

For more information on the COVID-19 CESCE Facility click here.

Shall we discuss it?

If you would like more information, visit any of our branch offices.

COVID-19 CESCE Facility

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