The approval of Royal Decree-Law 27/2021, of November 23, which extends certain economic measures to support the recovery, brings with it a series of measures aimed at adapting the latest legislative changes at the European level to Spanish domestic law. In particular, this includes extending the dates for aid to businesses and the self-employed to mitigate the negative economic effects of the COVID-19 restrictions.
In the Official State Gazette (BOE) of November 24, Royal Decree-Law 27/2021, of November 23, was published, which establishes the extension of a series of provisions whose validity will extend beyond December 2021, in order to provide a framework of legal certainty that grants economic stability and supports companies in this phase of recovery.
The Council of Ministers has agreed to extend, in line with the extension of the Temporary Framework for State Aid of the European Union, three very important aspects for the preservation of your business:
- The deadlines for applying for public guarantee lines,
- The measures to strengthen solvency included in the Code of Good Practices agreed with financial institutions in June 2021
- The threshold for accumulating aid per beneficiary, which goes from 1.8 to 2.3 million euros.
These alternatives will be essential for many self-employed individuals and companies that have not recovered their income level and cannot meet the payment obligations they agreed to when applying for an ICO loan.
It is important to remember that Royal Decree-Law 5/2021, of March 12, on extraordinary measures to support business solvency in response to the COVID-19 pandemic, authorized the Government to adopt additional measures to make loans backed by public guarantees more flexible, thus allowing this financing to be incorporated into the restructuring processes agreed between banks and their clients. An essential component of this set of measures is the Code of Good Practices approved by the Council of Ministers on May 11, 2021. Financial institutions that voluntarily adhered to it assumed a series of commitments to facilitate the renegotiation of guaranteed debt.
The Council of Ministers has agreed to extend the application period for financing guaranteed by the Official Credit Institute (ICO), CESCE, or CERSA (guaranteed financing), as well as to raise the economic thresholds for refinancing such financing, incorporating these modifications into the Code of Good Practices. This agreement was published in the Official State Gazette (BOE) on December 1, 2021, through the new Resolution of November 30, 2021, issued by the State Secretariat for the Economy and Business Support
This amendment to the Code of Good Practices is adopted in response to changes introduced in the European Union's Temporary Framework for State Aid and seeks to align the timeframe for guaranteed financing with other measures recently adopted to promote economic recovery, such as the extension of the "bankruptcy moratorium" or the temporary suspension of the cause of dissolution due to losses.
Entities initially adhering to the Code of Good Practices will have a period of one month to inform the General Secretariat of the Treasury and International Finance of their intention not to be bound by the modifications introduced and to continue to be governed by the aforementioned Code in its original version.
The most relevant modifications introduced in the guaranteed financing and in the Code of Good Practices are detailed below, comparing it with the previous situation for ease of understanding.
Extension of the deadline for applying for the measures provided for the renegotiation and restructuring of guaranteed financing
In the original wording contained in the Resolution of the Secretary of State for Economy and Business Support of May 12, 2021, the Code of Good Practices established different maximum deadlines for application, execution and maintenance of restructuring measures for guaranteed financing.
The amendment to the Code of Good Practices extends these deadlines by six months, without modifying or introducing additional restructuring measures (except for the possibility of requesting a second transfer (debt reduction) in certain cases). It also facilitates the extension of the maturity date for transactions affected by the volcanic eruption on the island of La Palma, significantly reducing the eligibility requirements for this measure.
Thus, the new deadline for applying for the restructuring measures of the guaranteed financing is reflected in the following table:
Modification of the economic thresholds that determine the maximum extension of the maturity period of the guaranteed financing
One of the restructuring measures expressly provided for in the Code of Good Practices regarding guaranteed financing is the possibility of extending its maximum maturity date. This maximum term varies depending on certain economic thresholds, which have been modified by the new regulation. Following the modification, these are the thresholds that must be taken into account when determining the maximum extension of the maturity date:
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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