The Valencia Institute of Finance Expands Liquidity Support for Businesses
The Generalitat, via the Valencia Institute of Finance (IVF), has introduced a new credit limit designed to help companies and freelancers secure liquidity and keep operations flowing in the face of rising energy and production costs. Finance Minister and Economic Model, David Spaint, announced the initiative, noting a total allocation of 170 million euros for this program.
The new line builds on a program that was extended last year to provide liquidity for restoration and tourism sectors. Its success led to an increase from an initial 50 million euros to 150 million euros. This time IVF aims to broaden its reach, benefiting a wider range of activities that require extra liquidity, including manufacturing, transport, commerce, and services that have been hit hard by increases in the cost of consumables, according to regional officials.
“The objective of the new call is to support companies facing higher energy and production costs and to help them confront the new economic challenges we face after the pandemic and the war in Ukraine,” stated the Finance Minister.
Key Conditions
The new lines allow for direct financing or up to 20 percent of non-refundable installments. In addition to the requested amount, borrowers will not be required to repay a 1.5 percent interest rate cut at a fixed rate, a measure intended to shield businesses from anticipated rate hikes.
Repayment terms offer a two-year grace period and a potential repayment window of up to ten years for working capital and investment operations. An innovative feature of this line is the option for a “lead credit.” In this arrangement, the loan’s capital is repaid at the end of its useful life, typically four years, enabling the company to rely on financing while only paying interest during that period.
“Rising interest rates and gaps left by COVID-era projects have driven the Generalitat to tailor lines to the needs of each company and each region,” emphasized Spain, underscoring that this support will help preserve employment in the affected firms. The announcement followed a ceremony with the participation of the IVF director, Manuel Illueca.
In 2022, 71 million euros were allocated to Alicante, highlighting the regional impact of the program. In the first half of this year, the IVF secured 300 financing transactions totaling 221 million euros, with Alicante accounting for 70.74 million euros, roughly 32 percent of the total. This figure is expected to increase with the new Reactive series in place.
Spain also announced an expansion of the campaign to reach smaller municipalities through Local Development Agencies, in coordination with Community municipalities, to support Generalitat’s hotlines. In Alicante, all regions already have IVF-backed companies. To date, promotional agreements have been signed with 51 municipalities across the Community, and the Generalitat aims to extend cooperation to all small and medium-sized municipalities within the autonomous community.
These measures are part of a broader strategy to stabilize business activity and safeguard employment as regional economies navigate persistent cost pressures and post-pandemic adjustments. The IVF remains a central tool in channeling credit and liquidity where it is most needed, with a focus on practical, near-term relief for small and medium-sized enterprises across the Valencian Community and beyond.