Editor’s note: This article was first published in November 2010. It describes the ICO credit lines and eligibility criteria as of that date, including fewer than 250 employees and turnover up to 50 million euros. The contact details and the ICO’s attachment to the Ministry of Economy and Finance are also from 2010; current lines and conditions differ.
The Instituto de Crédito Oficial (ICO, Spain’s official credit institute) has once again promoted its credit line for entrepreneurs, companies that need to expand and investors who decide to invest in Spain. That said, a reader asked us what criteria are used to grant these loans and what the best way to apply for them would be, since she applied in 2009 and was turned down. So we feel we have to give a “new talk” on topics we’ve already covered.
First and most important: the fact that ICO loans are being offered doesn’t mean they’ll be granted to every entrepreneur who applies. That’s obvious. Nor will they be granted to every company that decides to expand, because there isn’t enough budget for that.
To begin with, the conditions under which entrepreneurs can access an ICO loan are very broad. The loan is aimed at the self-employed (autónomos) and at small and medium-sized companies that meet the following requirements:
- Fewer than 250 employees.
- Annual turnover of no more than 50 million euros and a balance sheet total of no more than 43 million euros.
- Not holding, or being held to the extent of, 25% or more by a company or group of companies that don’t meet the above requirements.
In short, most entrepreneurs and a high percentage of companies and businesses across the country.
However, an ICO loan is a loan like any other, with specific conditions that your bank branch will explain to you. And, for your peace of mind, the branch won’t charge you any fee either for the information or for granting the loan, if it goes ahead.
And as with any loan, what they’re going to examine is the viability of your business plan or project, so it’s absolutely essential that you put real effort into studying what you want to present to the bank. As we discussed in the previous article, your business plan will be the key piece for working out whether your project is viable, and presenting and explaining it properly will be what triggers the bank to accept or reject your ICO loan.
I recommend reading these two articles of ours:
- Mistakes when drawing up a business plan and planning a business
- The structure of a good business plan
Here is the ICO customer service number, where you can ask for all the information you want from 9:00 to 14:00.
Tel.: 900 121 121
More about the ICO
The Instituto de Crédito Oficial is a state-owned business entity attached to the Ministry of Economy and Finance through the Secretariat of State for the Economy, and it has the status of a State Financial Agency.
The ICO works to grow the national wealth and improve its distribution, and it promotes economic activities that deserve priority attention because of their social, cultural, innovative or environmental importance. The ICO supports Spanish companies’ investment projects so that they become more competitive and contribute to the country’s economic progress.
ICO financing is aimed at boosting sectors such as the film industry and transport, supporting technological innovation projects and renewable energy, and strengthening the presence of Spanish companies abroad.
It also works with economic policy programmes in times of crisis or natural disasters, or as a tool to support exports.
Featured image: Vilacor, CC0 1.0, via Wikimedia Commons.
