In these difficult times for everyone, grants and subsidies can provide a balloon of oxygen for many companies and entrepreneurs.
Coinciding with the beginning of the State of Alarm and the beginning of the pandemic, the Ministry of Science approved extraordinary measures through the Center for Industrial Technological Development (CDTI) to continue supporting the maintenance of innovative activities with high added value.
The main innovation was the application of a reduction in the guarantees requested to all R+D+i projects that were approved as of March 14, 2020. This measure allows SMEs and mid-cap companies to be exempt from providing guarantees.
Thanks to this measure, R+D+i grants would have even become more attractive. However, to receive this type of funding, the company or project must meet a certain financial solvency.
Companies that are suffering from COVID crises are interested in these types of lines because they can help them stay afloat and continue innovating, but sometimes their numbers don't match those requested from the CDTI. Something similar can happen with other European aid.
If your company is considered a 'company in crisis', it will hardly be a recipient of these funds. Despite complying with other financial ratios, the CDTI and the other bodies will not accept the procedure, as indicated in paragraph 18 of Article 2 of Regulation (EU) No. 651/2014.
How to check if your company is in crisis
The CDTI also includes those who have voluntarily applied for bankruptcy or have been declared bankrupt. It also excludes as beneficiaries companies that are not up to date with their tax or Social Security obligations.
To summarize, it can be said that a 'company in crisis' is one in which cumulative losses are more than half of its own funds.
If it is a limited liability company, we will talk about a 'company in crisis' when more than 50% of its subscribed share capital has disappeared on the balance sheet as a result of accumulated losses, or if the transaction own funds — accumulated losses — subscribed capital shows a negative figure greater than half of the subscribed share capital.
In the case of a company in which a partner has unlimited liability for the debt, it is considered as such in the event that more than half of the equity in its accounts has disappeared due to accumulated losses or, when subtracting the accumulated losses from equity, a figure of less than half of the own funds is obtained.
The CDTI will check if your company has demonstrated its business model and if it has benefits and revenues. You will also want to know your net worth and the leverage ratio, in order to calculate the guarantees that may be required. However, the leverage ratio would not count taking into account the measures promoted by the CDTI with COVID-19.
