The pandemic and the subsequent economic crisis caused the Government to launch various initiatives aimed at alleviating these effects on companies, with the aim of achieving their survival. One of those aids has been ICO loansa line of financing launched in March 2020 with which the Official Credit Institute (ICO) helps finance both new investments and improvements in the applicant companies.
Nevertheless, only 2 out of 10 SMEs have applied for an ICO loan since then, as detailed by Hiscox, an international insurance company specializing in companies, in its I Hiscox Report on SMEs and the self-employed in Spain. Among the applicants, only 54.5% believe that they will be able to repay the loan on time and form before the deadline extended, until June 2023 by the Government, while within the other 44% who do not know if they will be able to carry it out, there are different possibilities: 3.4% directly foresee non-payment, 13, 1% believe that the solution involves refinancing the debt and another 9.8% for its restructuring and 19.2% have not thought of any concrete measure for when the term expires.
Next Generation funds have little impact on SMEs
Another of the ways that was made available to small and medium-sized companies to deal with the current situation has been the Next Generation funds. These funds come directly from the European Union, launched in June 2020 also to deal with the crisis triggered by the pandemic. However, they have had very little impact on the Spanish business community in light of the fact that, as of June this year, only 2.4% of SMEs had requested it. In fact, this percentage is concentrated in 8 autonomous communities, since in the other 9 that make up Spain no SME has requested these funds.
Moreover, within those that had not yet done so, 87.6% also have no plans to do so in the future. On the other hand, within the companies that had applied, there has been a better reception since 70% plan to request some other Next Generation fund.
When using this money to improve the company, there are many initiatives that can be carried out. In this sense, digitization of the production process is positioned as the favorite option (21.2%), followed by the improvement of efficiency and sustainability (18%), the attraction of talent with a focus on the new generations (16.6%), the reinforcement of cybersecurity (16.5%) and innovation driven by new technologies (13.2%).
“That SMEs are going through a complicated economic situation is nothing new, what is more striking is the fact that few of them have chosen to make use of the tools that the Government has made available to alleviate these effects. In many cases, it may be due to ignorance, to the bureaucracy behind it, among other possibilities, but the reality is that in the end, the majority of small and medium-sized companies are facing the economic crisis alone and that is why Hiscox we want to support them by offering them a safety net so that they can continue to operate without fear”, Explain Ricardo Sanchez, Director of Innovation and Alternative Distribution of Hiscox Spain.
