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5. Aid for innovative SMEs

Notwithstanding the special treatment usually given to SMEs in the context of the public financing programs or initiatives which have been examined in other sections of this chapter, the following is a list, to be taken as an example, of some lines specifically targeted at entities of this type when they engage, in particular, in innovative activities.

In particular, it is worth mentioning the financing which is offered by the National Innovation Enterprise (Empresa Nacional de Innovación or ENISA) to small and medium-sized companies through various lines targeted at fostering their formation, their growth or their consolidation.

As an example, we indicate below the main characteristics of some of these lines, although both the availability of funds and the conditions applicable for 2020 will ultimately depend on the budgetary framework finally approved for this year.

  • ENISA Young entrepreneurs: Aimed at stimulating the formation of enterprises backed by young entrepreneurs (not older than 40 years of age), which are provided with the necessary financial resources for SMEs and Startups, so that they are able to make the investments required for the business project during its initial phase, no guarantees require.

    Potential beneficiaries are SMEs (i) which pursue their activity and have their registered office in Spain; (ii) which have their own legal personality and whose incorporation took place not more than 24 months prior to the submission of the application; (iii) which have an innovative business model or one with obvious competitive advantages; (iv) which evidence the technical/economic viability of the project; (v) whose financial statements for the last year ended have been filed with the Commercial Registry or any other appropriate public registry; (vi) the majority of whose capital is subscribed by young entrepreneurs (aged under 40); and (vii) which are active in any area of business activity (other than real estate and finance). Finally, minimum contributions are required from the shareholders (of at least 50%), in the form of capital, depending on the amount of the loan, as is proof of the project’s technical and economic viability.

    Eligible investments are those required for the start-up of the business project during its initial phase and, specifically, the acquisition of both the fixed and the current assets required for the pursuit of the activity.

    Aid will take the form of a participating loan of not less than €25,000 and not more than €75,000, with an applicable interest rate equal to Euribor plus 3.25% in the first tranche and, in the second tranche, variable interest of between 3.0% and 6.0%, depending on the financial return of the enterprise, in line with the transaction’s rating. Interest and principal will be repaid monthly..

    The loan matures after a maximum of 7 years and there is a grace period of not more than 5 years for the repayment of principal.

  • ENISA Entrepreneurs: Aimed at providing financial support to recently formed SMEs and Startups, promoted by entrepreneurs (of any age), so that they are able to make the investments required for the business project during its initial phase, no guarantees required.

    Potential beneficiaries are SMEs (i) which pursue their activity and have their registered office in Spain; (ii) which have their own legal personality and are incorporated as a corporate enterprise no more than 24 months before the application is filed; (iii) whose business model is innovative or has clear competitive advantages; (iv) which have shareholders’ equity equivalent, at least, to the amount of the loan; (v) who evidence the technical/economical viability of the project; (vi) whose financial statements for the last year ended have been filed with the Commercial Registry or any other appropriate public registry; (vii) which have a balanced financial structure and management of a professional nature; and (viii) which are active in any area of business activity (other than real estate and finance).

    This aid will take the form of a participating loan of between €25,000 and €300,000, at an applicable fixed interest rate equal to Euribor plus 3.75% for the first tranche and, in the second tranche, variable interest of between 3.0% and 6.0%, depending on the financial return of the enterprise, in line with the transaction’s rating. Interest and principal will be repaid quarterly.

    The loan matures after a maximum of 7 years and there is a grace period of 5 years for the repayment of principal.

  • ENISA Growth: Aimed at financing projects promoted by SMEs, no guarantees required, which envisage making competitive improvements or executing consolidation, growth and internationalization projects or corporate transactions, based on viable and profitable business models, aimed specifically at achieving any of the following objectives: (i) the competitive improvement of production systems and/or a change in production model; (ii) expansion through an increase in production capacity, technological advances, an increase in the range of products/services; (iii) diversification of markets; seeking out capitalization and/or debt on regulated markets, or (iv) the financing of business projects through corporate transactions.

    The requirements to be met by the beneficiary are basically those described for the preceding line, although, for loans approved for an amount exceeding €300,000, the financial statements for the most recent year ended must have been submitted to external audit.

    The amount of participating loans granted under this line will range between €25,000 and €1,500,000, repayable in a maximum of 9 years, with a grace period of 7 years for the repayment of the principal. The applicable interest rate is Euribor + 3.75% in the first phase and variable interest, depending on the financial return of the enterprise, with a maximum limit of between 3% and 8%, in the second phase, according to the transaction’s rating.