The Governing Board has approved a line of guarantees for Madrid SMEs, freelancers and entrepreneurs for a value of five million euros, which will generate the possibility for financial institutions to grant them loans worth close to 55 million euros.
In this way, those who request it will be able to access different credits with the advantage of having the guarantee of GuaranteeMadrid, which will improve their solvency in order to face new projects with the entities with which they decide to work.
The City Council's contribution will go to segments and sectors of activity that are being particularly affected by the direct and indirect consequences of the pandemic and by the confinement measures and drastic reduction of certain economic activities. These beneficiary sectors will be mainly those made up of the self-employed and SMEs, particularly micro-SMEs and, exceptionally, small businesses, from the municipality of Madrid.
The contribution will serve to support the provision of guarantees intended to facilitate loans to entrepreneurs, both by traditional financial entities and by neobanks, participatory financing platforms and other entities.
The guarantees will be used to cover financing operations and credits for the self-employed for a value of up to 75,000 euros and for SMEs, with a limit of 250,000 euros.
The advantage is that the maximum cost in the study carried out by the entity of the operation may not exceed 0.5 %, when it is normally higher. In addition, the cost of these guarantees may not exceed 1 % of the amount remaining to be returned, thus being very competitive. The interest that the bank will charge may not exceed a maximum fixed rate of 2 %.
This action is part of a set of measures that are being developed by the Economy, Innovation and Employment Area in a joint and coordinated effort with the Community of Madrid so that the region and the city can continue to be an engine of economic development, contributing thus to the recovery of activity despite the effects of the pandemic.
When applying for guarantees, it is essential to be self-employed or micro-SME (company with less than ten employees and with turnover or assets of less than two million euros per year) and, exceptionally, as a small company (less than 50 employees). ), regardless of its legal nature. In addition, it will be necessary for them to have their registered office or work center in the city of Madrid.
They can request them companies from any sector of activity, particularly those affected by the crisis. In this sense, those companies that had to close due to the state of alarm decree, those that have experienced a reduction of at least 25 % in their billing compared to the same month of the previous year or compared to the month of February 2020 and those that can prove that in the following months the effects of COVID-19 had an impact with gravity in its business activity.