Access to finance
05 November 2009by Ina Dimireva -- last modified 05 November 2009
An overview of the sources of finance available to SMEs in Spain.
Legal requirements
Having access to sufficient finance can become the cornerstone of a company's success, not only during the start-up process, but also throughout the lifetime of the business. It is what allows society to adapt and expand continuously.
Corporate finance [ES] (Madri+d)
Finance for SMEs (General Directorate of the SME, Ministry of Finance and the Treasury)
Investors or partners
This is the main source of finance when starting up a company. In exchange for a capital injection, the partners or investors may obtain a return by, for instance, profit distribution or capital gains generated by the sale of their shares or holdings.
Venture capital/investment
An investor, whether private or public, buys a minority holding in an SME on a temporary basis. In so doing, they offer their support for management and establishment, start-up or expansion phases. If the business becomes successful, private investors recoup their investment plus any capital gains generated through the sale of their holding, whilst government investors will have contributed towards regeneration of the fabric of business. AXIS, a government-run organisation under the auspices of the ICO, dedicated to venture capital, is an example of a government investor in Spain.
AXIS - Participaciones Empresariales, S.A.
Mutual Guarantee Organisations (MGS)
An MGS is a non-profit organisation that acts as a guarantor with a bank for a small or medium-sized enterprise. If an SME requests credit or a loan and it does so through an MGS, it will have a better chance of obtaining the loan, since the MGS will be liable to the bank if the SME fails to meet its repayments.
MGSs, in turn, are guaranteed by a higher organisation, namely Compañía Española de Reafianzamiento, S.A. (CERSA), which essentially refinances or provides partial cover for the risk undertaken by an MGS. CERSA also has a specific helpline for start-up or recently established companies with fewer than 100 employees.
Types of finance
- Finance for debts: characterised by the fact that the entrepreneur requests a certain sum of money, plus agreed interest, which must be repaid within an established timeframe.
- Finance for capitalisation of shareholders' funds: money is received in exchange for shares in the business, such as venture capital investment, or delisting of companies.
- Government subsidies and grants: grants and subsidies available to an entrepreneur include grants for hiring employees from certain groups, Social Security subsidies, etc.
- It is worth asking for advice from the different levels of local government and the provincial chambers of commerce.
Aside from private banking organisations, which offer numerous financial products specifically for business, in Spain there are several government agencies offering corporate finance facilities, such as ICO or SEPIDES.
- Instituto de Crédito Oficial (ICO - Official Credit Institute) is a government business organisation established under the auspices of the Ministry of Finance and the Treasury.
All finance facilities offered by ICO
- SEPIDES is another state-run agency specialising in helping businesses located in the most impoverished areas, offering them specific finance facilities.
ICO (Ministry of Finance and the Treasury)
Subsidies for Social Security Contributions [ES] (Social Security)
Subsidies in contracts (INEM)
Map of subsidies per Administrative Region [ES] (Online Complex for Entrepreneurs)
Resources
Portal del Comerciante (website for traders) describes the financial products used more frequently by small and medium-sized enterprises.
Search engines for grants and subsidies
Sistema de Información Empresarial (SIE - Business Information System) (SME DG, Ministry of Finance and the Treasury)
Valencia Chamber of Commerce [ES]
Search engine for grants and subsidies provided by the Bank of Spain [ES]
The Ventanilla Única del Empresario (One-Stop Business Shop) is a website with information and support for entrepreneurs in Spain, which provides the option to complete formalities online, management, finance, etc.
Programmes
Specific finance for ICT and R&DPlan Avanza: this scheme, implemented by the Spanish Government in conjunction with local government with a view to complying with the Lisbon Strategy, offers support and finance to businesses, government and citizens, to facilitate adaptation to ICTs and new technologies.
Programa ARTE PYME: a scheme of subsidies for SMEs, to help them carry out advanced telecommunications service projects.
ARTE PYME [ES] (Ministry of Industry, Tourism and Trade)
Programa de Fomento de la Investigación Técnica (PROFIT - Scheme for the Development of Technical Research): this involves competitions for government grants, aimed at stimulating businesses and other organisations to carry out activities involved in technological research and development.
Personalised help and advice
The network of Ventanillas Únicas Empresariales (VUE - One-Stop Business Shops), located at the sites of Chambers of Commerce, also offers support and advice to entrepreneurs on all aspects relating to finance and grants.
Ventanilla Única Empresarial [ES]
The Enterprise Europe Network provides businesses with information and advice through its local partners.
Enterprise Europe Network – contact points – Spain
Business support organisations can advise businesses on how to find financing.
Source: European Commission
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