In order to strengthen the liquidity of export companies, the Government approved a Royal Law-Decree on urgent extraordinary measure to deal with the economic and social impact of the Covid-19. These measures strengthen the capacity of the CESCE (Spanish Company of Export Credit Insurance) to increase the State’s coverage of its guarantees. In addition, import customs formalities are expedited in the industrial sector.
In accordance with the provisions of the Royal Decree-Law, the creation of an insurance coverage line of up to €2,000 billion is authorised, to be charged to the Internationalisation Risk Reserve Fund, with a duration of 6 months from its entry into force. Export companies will be able to choose working capital loans without the need for a direct relationship with international contracts, provided that they respond to new financing needs and not to situations prior to the current crisis.
This measure is aimed at small and medium-sized enterprises as well as other larger companies, provided that they are unlisted entities in the following circumstances:
- Internationalised companies or companies in the process of internationalisation, by fulfilling at least one of the following requirements: Companies in which international business represents at least one third (33%) of their turnover or companies that are regular exporters (during the last four years).
- Companies 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.
Therefore, companies in a situation of bankruptcy or pre-bankruptcy are excluded from this measure, as well as those with unpaid debts to public sector companies or debts to the Government, registered before December 31, 2019.
Furthermore, the Royal Decree also states that the percentage of credit risk coverage for transactions under this line of cover shall not exceed the limit that may be established at any time in accordance with EU regulations.