Mutual guarantee societies
Reciprocal guarantee companies (RGCs) are non-profit financial entities regulated by the Bank of Spain and with a specific field of action (by autonomous region or sector). Their main objective is to gain access to credit for small and medium-sized enterprises and improve their financing conditions by extending guarantees before financial entities.
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Characteristics
Advantages
- Access to financing for companies that due to a lack of guarantees cannot secure this
- Best conditions in terms of interest rates and terms thanks to agreements between RGCs and Banco Sabadell . This reduces financing costs for the SME
- Obtain a guarantee , provided that the project is viable as a whole in the opinion of the team analyzing it
- Expert advice by analysing, evaluating and advising on the investment project that the small enterprise is to embark upon
- Equity packages will not necessarily be effected by the guarantees, although they shall be available for other purposes.
Operation
Any small or medium-sized enterprise can obtain a RGC guarantee, provided it needs financing and is a participating member.
Each RGC defines the criteria for being Participating Members. The most usual means is by acquiring shares in the RGC equivalent to a percentage of the RGC guarantee amount that would be paid upon maturity
Types of guarantee
Types of guarantee Financial Corresponds to credits or loans obtained by the SME guaranteed by any financial entity through which the guaranteeing entity is directly obliged to refund.
- investment (stock or real estate)
- working capital refinancing
Trade Corresponds to trade operations that involve the deferred payment of any purchases of goods, payment by installments, sums paid in advance, etc.
- to guarantee deliveries on account of home savings accounts
- to suppliers
- of lines of discount
- to third parties
Technical These do not represent a direct payment obligation for the guaranteeing entity, but respond in the event of default on commitments contracted by the guaranteed party, generally, before a public entity in relation to the importing of goods by temporary arrangement, participations in tenders and auctions, the execution of projects or supplies, the proper operation of machinery sold, etc.
- definitive bonds
- provisional bonds
Guaranteeable operations and situations
- Companies with high share and concentration of risk in the bank and that cannot access new amounts without additional guarantees
- Companies recently set up without actual economic and activity data
- Companies with high working capital needs and technical guarantees
- Companies with high working capital needs (by sector)
- Capital restructuring
- Self-employed persons who pay taxes by module and therefore do not avail of accounting records that justify income, although he/she has a good payment record
- Real estate purchases linked to business activity with financing of up to 100% of the appraisal value
- Company and members without sufficient equity solvency or with previous mortgage encumbrances, but who have a viable project, though lacking in guarantees
- Companies that have a PROFIT grant awarded and need a guarantee to obtain the refundable PROFIT loan advance
- Guarantees from property developers relating to purchases of land (swap guarantees, deferred payments, etc.) from homebuyers (payment to account guarantees) or builders (technical guarantees presented to councils)
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- SGR List
Currently Banco Sabadell has signed collaboration agreements with almost all of the reciprocal guarantee companies, providing coverage to the vast majority of the autonomous regions.
In general terms, credits, loans and lease financing agreements are financed, always with joint guarantee by the RGC in the policy itself and subject to presentation by the client of a document whereby this RGC can endorse the stated operation subsequent to a feasibility study of the project, both technically and economically.
Field of action by autonomous region
Field of action by autonomous region RGC Andalusia Avalunion, S.G.R. Andalusia Suraval, S.G.R Aragon Avalia Aragón, S.G.R Asturias Asturgar, S.G.R . Balearic Islands Isba, S.G.R . Canary Islands Sogapyme, S.G.R. Canary Islands Sogarte, S.G.R. Cantabria Sogarca, S.G.R. Castilla y León Iberaval, S.G.R. Catalonia Avalis de Catalunya, S.G.R. Extremadura Extraval, S.G.R. Galicia Afigal, S.G.R. Galicia Sogarpo, S.G.R. Madrid Avalmadrid, S.G.R Murcia Undemur, S.G.R . Navarre Sonagar, S.G.R. Basque Country/La Rioja Elkargi, S.G.R Basque Country Oinarri, S.G.R. Valencia S.G.R. Comunidad Valenciana
Field of action by sector
Field of action for autonomous region RGC Agricultural Saeca Audiovisual Audiovisual Aval, S.G.R. Transport Transaval, S.G.R.