Banks weave a safety net for self-employed people affected by the pandemic with credits

The central government and the communities disagree about the paralysis of all economic activity in the coming weeks due to the coronavirus crisis. The truth is that the vast majority of the activity is already in a dry dock, and one of the most exposed links is the autonomous one. Financial institutions are presenting instruments for the self-employed due to the paralysis of their businesses. Also, incidentally, to attract customers to the banking sector that, according to Barclays, will lose half of its profits in the United States due to the pandemic, while Spanish entities do not hide their concern.

Banco Santander will make available to SMEs and the self-employed a liquidity line of pre-granted loans of 20,000 million euros, with interest rates payable one year. Thus, the bank explains, the short-term liquidity of the affected businesses is guaranteed and there is "greater liquidity in the management of cash flows."

Caixabank chooses to extend the terms and allows its clients to "formalize currency operations" in up to 24 months. More than 440,000 freelancers will also be able to take advantage of a line of 25,000 million in pre-granted loans.

More information

• Guide for the self-employed to request the benefit for cessation of activity

• The bank claims that public guarantees cover 80% of the loans

• Public guarantees can finance invoices, payrolls or taxes

Other entities, such as Banco Sabadell, have deployed 3,500 managers in a door-to-door strategy. The bank assures that this network of managers will visit SMEs and the self-employed to adapt to their liquidity needs with the ultimate goal of keeping their businesses afloat. For this, the Catalan bank has activated a liquidity line of 15,000 million.

Extension of short-term credit repayment terms and bridging financing for long-term debts are Bankia's recipes to alleviate liquidity problems for its clients, including the self-employed. According to sources from this bank, the maturity of the financing of the working capital will be extended until June 30, the same date on which the commercial lines will expire ( confirming or financing remittances).

BBVA, for its part, opts for the immediate treasury needs of the self-employed, to which it opens "immediate liquidity lines of up to 25,000 million," says the Bilbao bank. Abanca will mobilize 1,800 million in pre-granted credit both in the short and long term for the self-employed through the 'Plan Anticipar'.

ICO lines are activated

The Royal Decree-Law of the Government, among other aspects, includes an increase of 10,000 million in the debt limit for the Official Credit Institute (ICO). Thus, entities will be able to supply liquidity to SMEs and the self-employed in this time of readjustment.

Santander has been the first entity to activate the ICO COVID-19 Line, which amounts to 400 million euros, and which may be used by companies and freelancers in the tourism, transport or hospitality sector to reduce the impact of the fall in the pandemic activity. In this sense, it is already possible to request a maximum of 500,000 euros for a period of between 2 and 4 years, with a mandatory grace period, and with a fixed rate of 1.49% and no opening fee. The ICO guarantee amounts to 50% of the financing.

BBVA has also announced the subscription of this same line under the same conditions, as has Cajamar.