The Reciprocal Guarantee Society (SGR) Extremeña de Avales (Extraval) has provided a volume of loans to SMEs, self-employed workers and entrepreneurs in Extremadura worth 8.8 million euros in 2014. These operations have been channeled from 294 guarantees .
These are some of the data analyzed at the Ordinary Extraval General Meeting, which has served to give the green light to last year’s accounts and which has allowed analyzing the activity data of the company.
At the end of 2014, Extraval has accumulated a “historic” figure of formalized guarantees of more than 154.9 million euros, from more than 4,343 operations. With these funds, the action of the Extremaduran SGR has led to an induced investment of 201.4 million euros.
At the end of last year, the number of current operations accumulated by the guarantor society of guarantee from Extremadura was 914. Its contribution to employment, based on this current risk in force, stands at more than 4,000 jobs, spread among 593 companies
On the other hand, the participants (companies that access financing from the SGR and contribute a small commission that, in a mutualistic way, allows financing to other partners that come to the company) of the entity were 1,394 as of December 31st. , and the number of protective partners was already at seven, the Extremaduran government reports in a press release.
Both Extraval and the rest of the remaining Spanish guarantee companies are immersed in an ambitious Strategic Plan that seeks to give greater prominence to a system of guarantees through which the necessary conditions can be created to convert viable business projects into tangible realities by facilitating financing.
This Strategic Plan of the Spanish Confederation of Guarantee Societies (SGR-Cesgar) aims to increase the number of companies supported throughout the country by 25,000 new SMEs this year and next, as well as a 50 percent growth in the number of formalized risk (amount granted in the form of loans / credits), up to 1,400 million euros, when the end of 2014 stood at around 900 million in the sector.
In total, the SGRs maintain a live risk (amount borrowed pending repayment) of 4,350 million euros in 116,000 financing operations throughout Spain. A fact that has – according to the Extremaduran Executive – a “clear impact” on support for employment, in particular, that companies financed with the guarantee of a guarantee society have allowed to maintain about 650,000 jobs in Spain.
Regarding repayment terms, six out of ten SMEs that attend an SGR such as Extraval face the amortization of their loans or credits in a period exceeding eight years. And in 92 percent of cases, the established return period is over three years.
Precisely the length of the deadlines is one of the competitive advantages that the guarantee companies offer compared to the traditional financing channels, something that makes the monthly quotas more affordable by the companies.
Along with this, more favorable and advantageous conditions stand out, as shown by the fact that the average amount guaranteed in 2014 was, in two of every three supported operations, less than 66,000 euros.
A historical sector for employment
At the close of 2014, the group of Guarantee Companies accumulates a historical figure of formalized guarantees for more than 27,500 million euros, from more than 700,000 operations. With these funds, the action of the SGR has led to an induced investment of 35,759 million euros in Spain.
Its contribution to employment stands at almost 650,000 jobs, distributed among 36,000 companies. In the case of Extraval, the number of current operations that accumulated at the end of last year was 914.
On the other hand, it should be noted that the sector has historically granted more than 80 percent of the applications submitted, which “demonstrates” the “reliability” of the SGR (intermediaries between SMEs and credit institutions) and the “high commitment” of the beneficiary companies when returning the amounts received.
The number of protection partners and partners in the reciprocal guarantee companies (that is, the shareholders, whether public institutions or SMEs) has increased during 2014 and there are already 116,662 operations promoted by these mutual entities.
Regarding the size of the companies, 75% of the guarantees have been destined to micropymes (companies with between one and ten workers).
Products and sectors
During 2014, the most demanded products by Spanish SMEs were those destined to financial guarantees (56 percent), whether they were investment or circulating fundamentally, while technicians (guarantees for public tenders) accounted for 44 percent, according to data from SGR-Cesgar.
Regarding the distribution according to the activity of the company, the services sector has led in Spain the number of operations with a percentage of 41 percent, followed by Industrial with 25 percent; El Comercio, with 19 percent; Construction, with 12 percent; and the Primary, with 4 percent.
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