5Aid 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.

Among others, we refer to 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,  in force in 2023:

• 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 during the initial phases linked to the formation of SMEs and Startups, so that they are able to make the investments required for the business project at such time, 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 a business model that is innovative, novel or one with obvious competitive advantages; (iv) the majority of whose capital is subscribed by young entrepreneurs (aged under 40); and (v) 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% of the loan), in the form of capital or equity, as is the above-mentioned 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, in particular, 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. An arrangement fee is established equal to 0.5% of the amount of the loan. A fee for early repayment and another fee for acceleration of the loan due to a change in the shareholder structure are also established.

  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, – based on several factors such as the amount of equity and the financial structure of the company – 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. Provision is also made for the payment of an arrangement fee of 0.5% and of another two additional fees: (i) for early repayment and (ii) for the acceleration of the loan due to a change in the shareholder structure.

  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, no guarantees required, projects promoted by SMEs which envisage making competitive improvements or executing consolidation, growth and internationalization projects, 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.

  The requirements to be met by the beneficiary are basically those already described for the preceding ENISA Entrepreneurs 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. Principal and interest will be repaid quarterly and provision is made for the payment of fees similar to the ones described in the preceding lines.

• ENISA AgroInnpulso (ENISA Agro-Food Innovation Line) which is aimed at fostering the digital transformation of enterprises in the agro-food sector and the rural environment, endowed for the purpose with funds from the Ministry of Agriculture, Fisheries and Food, which will be managed and administered by ENISA.

  Specifically, the participating loans offered under this line are available to small and medium-sized agro-food enterprises throughout the value chain, which (i) pursue innovative and/or technology-based activities, with special attention to those with the ability to create jobs for young people and women, and (ii) undertake the necessary investments and carry out their business project basing their activity on generating new products, processes or services.

  Enterprises and projects must comply with the same requirements as those described in the Growth Line above, including those relating to financing requirements.

  The amount of the participating loan granted may range between a minimum of €25,000 and a maximum of €1,500,000 – depending on several factors, such as the amount of equity and the financial structure of the enterprise – and it will be subject to an interest rate, in the first tranche, equal to Euribor plus 3.75% and, in the second tranche, a variable interest rate between 3.0% and 8%, depending on the enterprise’s financial profitability, according to the rating of the transaction. Interest and principal will be repaid quarterly and the same fees described above will be charged.

  The grant of the loan will not require guarantees additional to those required for the business project.

• Lastly, ENISA Digital Entrepreneurs is a line aimed specifically at supporting and fostering digital projects undertaken by female entrepreneurs, thanks to funds from the Ministry of Economic Affairs and Digital Transformation, which will allocate €51 million to this area over the next three years as part of the National Recovery, Transformation and Resilience Plan.

  The participating loans available under this line may be obtained both by start-up or growing SMEs (that is, those which are considering a consolidation, growth or internationalization project) and in which one or more women hold a relevant position of leadership or power in the company, either as a shareholder or as a member of the managing body or the executive team.

  In addition, as is customary in the other lines, these SMEs must (i) pursue their activity and have their registered office in Spain, (ii) have separate legal personality, (iii) have a business model that is innovative or with clear competitive advantages, (iv) have equity that is at least equal to the amount of the loan, (v) have technical/economic viability in relation to the project, (vi) have filed the financial statements for the last closed fiscal year at the Commercial Registry or at another relevant public registry, (vii) externally audit the financial statements of the last closed fiscal year if they receive a loan in an amount exceeding €300,000, (vii) have a balanced financial and professional management structure, and (viii) engage in any area of economic activity (except for real estate and finance).

  The amount of the participating loan that constitutes the aid may range between a minimum of €25,000 and a maximum of €1,500,000– depending on several factors, such as the amount of the equity and the financial structure of the enterprise – at an interest rate, in the first tranche, equal to Euribor plus 3.75% and, in a second tranche, a variable interest rate between 3.0 and 8.0%, depending on the enterprise’s financial profitability, according to the rating of the transaction. Interest and principal will be repaid quarterly and an arrangement fee of 0.5% of the amount of the loan must be paid (in addition to other fees for early repayment and acceleration of the loan due to a change in the shareholder structure).

  The loan will have a maximum maturity of 9 years and a grace period of 7 years for the repayment of principal.

  Lastly, the grant of the loan will not require the provision of guarantees additional to those required for the business project.