The Generalitat Valenciana will inject 50 million euros to complete a fund of 200 million euros that will enter innovative companies with average tickets of between 10 and 15 million eurosManuel Illueca, Director General of the IVF, has announced that the Generalitat Valenciana, with the support of the Valencian Institute of Finance (IVF), is already offering public funding lines of up to 110 million euros for the self-employed, SMEs and microSMEs, 70 million at 0% interest.
“IVF loans are subject to private law, so they are fully operational as they would be in any financial institution, even if all other administrative procedures are suspended at this time” Manuel Illueca.
For insolvency situations, a first line of credit is offered with improvements that can be used as liquidity for companies, such as: The current funding provided by the IVF will be free of charge to the company, at% of interest and at the cost of the guarantee covered by the Generalitat. Each operation can reach up to 750,000 euros. In addition, subordinated loans from the Generalitat are a tool to cover losses caused by Covid-19. Aimed at companies with fixed expenses and that, due to this situation, are making losses. Therefore, the solution is subordinated loans with very long terms. For this type of company we have a solution, subordinated loans that have very long terms, we are offering up to ten years but we are even considering extending to twelve years; with up to 3 years of grace period, so the businessman would not return a euro until all this situation has passed and returned to normal. At the moment, this line has 40 million euros.
“It is a more expensive type of financing, but the fundamental thing is that the money is there and that the customer can find in this instrument a mechanism to alleviate losses and also with very long shortages of up to 3 years.” “In addition, the interesting thing is to distribute it together with commercial banks, we balance companies so that they enter with lines of liquidity,” says Illueca.
To support large Valencian companies, the Government will present 50 million with an investment target of 200 million. This will have a professional manager. This is the first industrial fund offered by the Generalitat with large amounts aimed at investing in consolidated companies but in need of an injection to move forward as a result of this crisis.In addition, the General Manager considers it necessary to increase the percentage of coverage of (Cersa) for Mutual Guarantee Companies in order to cover the guarantee needs of vulnerable companies. Finally, it is being studied to strengthen the solvency of the SGR, right now it is at 20% and the objective is to increase to 30%.
“These two measures: increased coverage by Cersa and an additional contribution to the technical provisions fund, could make the SGR a decisive tool right now,” he says.
