More than 20,000 businesses in the province of Malaga, mainly small enterprises and self-employed workers, have started the year with an extra worry. As well as having to cope with the general uncertainty created by the health crisis and the increase in production costs, they face the prospect of having to pay back the state-guaranteed loans they took out in the darkest days of the pandemic, when their business ground to a halt or fell dramatically.
They ought to start paying off their debt in April, but different business associations have already raised their voices to call for the central government to put back the deadline again, for at least six months, so that the payment moves from spring to the end of this year.
"We need to buy time and if they could get six more months, that would be very important, because we believe that 2021, and probably also 2022, will be years of transition until the situation with the virus becomes more stable," said the vice-executive president and secretary-general of the Malaga business confederation, CEM, Natalia Sánchez.
"We are in the process of recovery. Many self-employed are currently having to face other payment commitments which had been deferred during the pandemic, but we are aware of the current situation, with an increase in infection and a rise in energy costs, so moving this back from April to October would be very important," said the president of the national federation of associations of self-employed workers, ATA, Lorenzo Amor.
Both representatives of the business world are calling for another moratorium in the repayment of these ICO credits, which were guaranteed by the state and awarded through the Instituto de Crédito Oficial (official credit institute) to businesses to help deal with the effects of Covid-19 on their activity.
The ICO formula was taken up by 21,169 businesses in Malaga province. The majority took out the loans in 2020, while another 1,104 joined the scheme in 2021, according to the latest figures released by the ICO. The Spanish state, therefore, has provided guarantees in Malaga to the value of 2.27 billion euros, at an average of 86,799 euros per loan.
The ICO reports specify that the vast majority of beneficiaries of this line of credit are small businesses and self-employed workers. Among them 41.6% are micro enterprises (with fewer than ten employees), 32.4% are self-employed workers and 24.1% are SMEs (small and medium-sized enterprises).
The deal was that the firms could apply for low-interest loans from their banks and the state - through the ICO - would guarantee up to 80% of the amount borrowed.
Government and banks signed an agreement for this line of credit, which established up to two years of non-payment and even release under certain very specific circumstances.
"The last solution is release; what the businesses owners are asking for is more time and that's what we want too," stressed the vice-president of the CEM. Sánchez pointed out that they had already extended the deadline to start repayment of these loans three times, and that another moratorium would be welcome for local industry.
"The ICO reports reveal that 43% of the loan operations had already requested a deferment of repayment, so this moratorium seems necessary," said Sánchez, who mentioned another element of uncertainty for businesses:
"From the second half of 2021, we've seen a significant increase in costs. There has been a recovery that raised all our expectations, but we have found an increase in energy costs for companies, and this has been felt more intensely by self-employed workers and SMEs. Then we have the sixth wave [of Covid], and so we're finding that any firm that applied for these ICO loans needs to gain some time," she pointed out.
"These six months would not just be a financial buffer for the self-employed, but also for the ICO itself and for the financial institutions, as this could prevent default," said Amor.
"At the moment we are in continual dialogue with the government. There have been deferments in other areas. Is the moratorium feasible? Yes. We hope that they show willing, because we believe that it's good for everyone," he added.