Spain to extend loan program for struggling businesses until June, sources say

MADRID, Nov. 16 (Reuters) – The Spanish government is preparing to extend the availability of government-guaranteed lines of credit by six months until June, while extending the maturities and grace periods of loans granted in the part of the program, according to three sources familiar with the matter said Monday.

Guarantees on all lines, designed to help businesses amid the coronavirus-induced economic crisis, would be extended up to eight years from the five originally planned for most loans, one of the sources said, adding that the cabinet was likely to approve the changes. Tuesday.

In addition, an additional year would be added to the grace periods, which would allow borrowers to delay payment without being charged late fees, defaulting or having their loans canceled.

Companies had until December to apply for the existing state-guaranteed funding program of 140 billion euros ($ 166 billion). The grace period on a large volume of loans ends in April, and many small businesses are concerned that they will not be able to meet their payments so soon.

The first line of 100 billion euros approved in March guaranteed loans for five years, while the second tranche of 40 billion approved in July guaranteed loans for eight years.

The Ministry of the Economy declined to comment.

$ 1 = 0.8447 euros Report by Jesus Aguado and Belen Carreno, written by Andrei Khalip Editing by Ingrid Melander

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