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ICO Loans For The Self-employed In Spain


ICO Loans

ICO loans for the self-employed are an exciting alternative to boost your business. They can cover amounts of up to €12.5 million in one or several operations.

You can use an ICO line to finance business activities, liquidity needs, digitalisation projects (especially those included in the Acelera Pyme programme), or even refurbishing homes and buildings. But let’s start from the beginning: what exactly are they?

What are ICO loans for the self-employed?

The Official Credit Institute (ICO) is a public entity managed by the Bank of Spain. Therefore, the same regulations as private banks govern it.

Its foundation is based on the concept of financial equilibrium. That means that it is geared towards promoting economic activities and fostering the sustainable development of companies. One of its fundamental values is equitable distribution. To guarantee this, it resorts to national and international financing or taxation.

ICO loans, or ICO lines, are aimed at projects with a lack of resources and good future prospects. They are open to companies of any size. Besides, they can be used by the self-employed, but also by large companies.

How do ICO loans work?

Although public, private financial institutions play a critical intermediary role during the approval process. The process consists of the following phases:

Application for funding

To start the application process, you must go to one of the partner credit institutions. You should bear in mind that the approval of an ICO loan is subject to analysis. So, to the process, you must submit a proposal that addresses two fundamental lines:

1. Personal information and presentation of the investment project

● What kind of project do you need to finance?

● What will the business model be?

● What are the market prospects for success?

● What exactly will the money to be received be invested in?

● Who is part of the project, and who will be responsible for it?

2. Submission of guarantees

As an entrepreneur, you should make clear your financial capacity to repay the loan.

● What is your financial solvency?

● What other assurances can you provide?

● Who is your guarantor?

As with any other financing model, the figure of the guarantee is particularly relevant for the project to be classified as viable. It would be best to remember that the minimum guarantees may vary depending on the credit institution processing the application.

Collateral analysis

Your proposal will be submitted for assessment once you have submitted your project report and the necessary documentation. Different factors are considered to determine the feasibility and proceed to approval or rejection.

These requirements vary depending on the entity’s policies, so before starting your application, it is advisable that you seek advice from different banks and evaluate the requirements and conditions requested in each of them. At the end of our article, you will find a list of all the banks that offer ICO lines.

The credit institution will determine the minimum guarantees, although the SGR or SAECA may also define them. Depending on your proposal, your level of solvency and the general viability of the project, the minimum guarantees to be provided will be defined.

The signing of the operation

If your proposal has passed the screening process and approved the application, the next step is to sign the transaction. It is essential that you carefully analyse the contractual conditions:

– repayment period and grace period,

– rate and amount of interest,

– commissions,

– expenses or the annual cost of the operation.

Delivery of funds

The intermediary bank notifies the Instituto de Crédito Oficial of the approval. After a variable period of time, the funds are transferred to the destination institution.

Delivery of ICO funds

The bank that handled the approval acts for the second time as an intermediary by transferring the proceeds received from the ICO to your bank account.

Return of funds

Once the proceeds have been received, the refund process is initiated following the terms and conditions specified in the contract.

Return of ICO funds

Finally, the bank returns the funds to the Instituto de Crédito Oficial.

What is needed to apply for an ICO loan?

There are some basic requirements and considerations that you should take into account before starting your application:

●     Purpose: In order to have access to an ICO financing line, the application must be aimed at obtaining liquidity to develop a business project. There is also the possibility of initiating an application to finance investments.

●     Types of financing: Investment should be limited to vehicles, assets for production, project or business acquisition and real estate rehabilitation. You must submit a project report at the application stage.

●     Repayment period: ICO loans have a repayment period ranging from 1 to 20 years. The period will depend on the type of investment, the guarantees available, or the amount to be received.

●     Specific guarantees: Each entity will require specific guarantees. In addition, these may vary according to the requirements defined by the MGS or SAECA.

●     Fees: Although taking out ICO loans is generally not subject to additional fees, there may be exceptions. For example, if early repayment is requested.

What documentation is needed to formalise an application to the ICO?

● Photocopy of at least the last two tax returns.

● Documentation of registration in the register of self-employed persons.

● Documentation accrediting continuous income over time.

● Professional or business guarantees: documents proving certain seniority within a company through a contract (TRADE or commercial).

● Certified photocopy of the NIF of all those involved in the application process.

● Photocopies of documents reflecting the status and amount of debts owed to external entities.

● The latest proof of payment of Social Security contributions.

What is the grace period for an ICO loan?

The grace period translates into the delay or postponement of the payment of the agreed repayment instalments. It is defined as a contractual clause that guarantees a time margin to deal with any incident that may occur during the repayment phase of the credit line granted.

The grace period can vary depending on the interest rate or the number of instalments. The grace period can range from one year to three years for both fixed and variable interest rates. Here, you can access a table with a breakdown of the interest rates and the grace period.

Banks in Spain offering ICO loans

ICO loans are available to entrepreneurs anywhere in the world. These lines are international and therefore work with a large number of banks.

Within Spain, any self-employed person can start the application process from the following banks:

– Abanca

– Banco Caixa Geral

– Banco Cooperativo

– Banco Sabadell

– Bankia

– Bankinter

– Bantierra Nueva Caja Rural Aragón


– BCC (Grupo Cajamar)

– C. R. Central

– Caixabank

– Caja Rural de Almendralejo

– Caja Rural de Asturias

– Caja Rural de Burgos

– Caja Rural de Soria

– Caja Rural de Granada

– Caja Rural de Jaén

– Caja Rural de Teruel

– Caja Rural de Zamora

– Caja Rural del Sur

– Caja Rural Navarra

– Cajasiete

– EBN Banco de Negocios, S.A.

– Globalcaja

– Ibercaja

– Liberbank S.A.

– Microbank

– Santander

– Triodos Bank NV

– Unicaja Banco

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