Three of Spain’s government backed organizations Official Credit Institute (ICO), Audiovisual SGR and Cersa have join forces to provide new loans up €600,000 to audiovisual companies to make projects and keep afloat.
The agreement was signed by Jose Maria Ayala, president of the Official Credit Institute (ICO), which is defined as the State’s Financial Agency; Estela Gallego, president of risk guarantor CERSA, attached to the ministry of industry, tourism and commerce; and Carlos Cuadros, president of Audiovisual SGR, a loan facilitator set up by the Ministry of Culture in 2005.
These loans will be available to companies and self employed individuals within the cultural sectors, including those in the film and theatre industries.
Film producers will be able to apply to the ICO for the €600,000 either through a loan to maintain their liquidity, which needs to be re-paid within three years, or to help finance film projects, which can be re-paid within seven years. If it is the latter the investment must be made within three months of the loan being confirmed.
“The ICO will assess each loan applicant in collaboration with us and then decide how much money they should actually receive depending on the companies pitch and ability to repay the loan,” Susana Serrano, manager of the Audiovisual SGR confirmed to ScreenDaily. “The ICO will provide the funds to the leading banks of Spain, including Caja Madrid, who will then supply the loans directly to the successful applicants. We are providing a guarantee for the loans and Cersa is covering 50% of the risk of that guarantee.”
The loans need to be paid back with interest of 3%, plus the standard European bank rate.
This will be a welcome boost to the Spanish film industry as producers have been very vocal about their concerns over the unwillingness of banks to provide credit. As Spanish producer Manuel Monzon recently told Screen: “Even when you have a good project that is interesting to the international market, you’ve already gained approval from the government for the national subsidies, sold the rights to TV and set up co-production agreements, most of the banks are still not willing to discount the financing.”
In a further interesting twist, the Spanish banking industry is currently going through a major transformation with several mergers expected to take place soon to help revive economic growth.