Includes how major projects are financed and gives examples where relevant. Explains activities of the multilateral development banks in and other aid-funded projects where procurement is open to U.S. bidders.
Last Published: 6/24/2019

Banks are the primary sources for short and long-term capital. While short-term financing is relatively easy to obtain, medium- and long-term funds are typically only made available to large companies and are thus more difficult to obtain.

  • The most important types of short-term financing are through loan agreements (pólizas de crédito), discounting of commercial bills, and loans against bills drawn on a borrowing company to the order of the bank (efectos financieros). Under a "póliza de crédito”, (the usual term is six months) the borrower has access to credit up to the maximum amount negotiated in the loan agreement. Spanish borrowers prefer "pólizas" to loans made against bills (efectos financieros or letras financieras) because the latter are subject to stamp tax. 
  • Commercial bills and other trade instruments are generally discounted under an overall credit line agreed upon by the bank and its client. Banks usually offer these lines for one year and prefer that short-term paper (30, 45 or 90 days) be passed through the line. 
  • Local companies can raise their discount ceilings by opening term or savings accounts equal to 5-20 percent of their drawings. Equity financing is also available. Savings banks offer primarily, but not exclusively, credit for projects within their local areas. Loans are directed towards financing projects that create new jobs and improve local infrastructure. 
  • The Official Credit Institute (ICO), an agency supported by the Government of Spain, offers special loan terms for industrial restructuring and for smaller firms. 
Credits from the European Investment Bank are significant in Spain and are available for investment projects for development of selected sectors and regions. 

Types of Available Export Financing and Insurance
Numerous financial organizations exist to assist U.S. exporters. These organizations include commercial private financial sources such as factoring, forfeiting and confirming services. U.S. federal, state, and local government agencies offer many different types of financing programs. Some are guarantee programs that require the involvement of an approved lender; others provide loans or grants to the exporter or a foreign government banks and Commercial banks use government guarantee and insurance programs to reduce risk associated with loans to exporters. Lenders use these government programs to protect themselves against the risk surrounding an exporter's ability to pay.
To determine financing options available, consult: Availability of Project Financing
The Export-Import Bank of the United States (ExImbank) is the federal government's trade finance agency and offers many programs to meet the financial needs of American firms and their buyers. Other agencies fill various market niches; the Department of Agriculture offers a variety of programs to foster agricultural exports while The Small Business Administration (SBA) caters to the needs of smaller exporters.

Types of Projects Receiving Financing Support
As indicated above, financing may be available to U.S. exporters from public and private U.S. institutions. In Spain, grants and incentives offered by different levels of the EU and Spanish Government, as well as by regional and local authorities, include: 
  • State and regional incentives for training and employment, especially focused on improving qualifications of active/under-skilled workers and fostering indefinite employment. 
  • State and regional incentives such as financial aid and tax benefits for specific sectors (agriculture and food, research and development, energy, mining, technological improvement). The “National Plan for Scientific Research and Technological Innovation,” partly funded by EU Structural Funds, aims to raise the level of Spanish science and technology and increase competitiveness and the efficient use of research and development results. 
  • Investment incentives to promote economic growth in less developed areas (Economic Promotion Areas and Special Areas), with a ceiling of up to 50 percent of the investment. 
  • State incentives for small and medium-sized firms (SMEs), known as "Iniciativa PYME." The Directorate General for Small and Medium Firms promotes several programs for SMEs, mainly for business cooperation and promotion of key areas (Information Services, Design Programs and Financing Programs). 
  • Incentives for internationalization, primarily for Spanish firms looking to invest or promote their business activities abroad, primarily through the Spanish Industry for Foreign Trade -- ICEX (Spanish Trade & Investment Institute). 
  • National government incentives for technology development and innovation in industrial sectors, principally through CDTI (Centro para el Desarrollo Tecnológico Industrial) and CSIC (Consejo Superior de Investigaciones Científicas).
  • EU incentives and grants from the European Regional Development Fund aid those areas with lower levels of income and high unemployment; EU incentives are routed through Spanish institutions. 

EU Programs
EU financial assistance programs provide a wide array of grants, loans, loan guarantees and co-financing for feasibility studies and infrastructure projects in a number of key sectors (e.g. environmental, transportation, energy, telecommunications, tourism, public health). From a commercial perspective, these assistance programs create significant market opportunities for U.S. businesses, U.S.-based suppliers, and subcontractors. For detailed information on the financing programs made available by the European Union, please see the 2018 European Union CCG.
 Loans from the European Investment Bank
The European Investment Bank (EIB) is the financing arm of the European Union. The EIB is a non-profit banking institution that offers cost-competitive, long-term lending in Europe. Best known for its project financial and economic analysis, the Bank makes loans to both private and public EU-based borrowers for projects in all economic sectors, such as telecommunications, transport, energy infrastructure and environment.
 While more than 90 percent of its activity is focused on Europe, the bank now works with over 150 non-EU states which receive around 10 percent of the entities funding.

Projects financed by the EIB must contribute to the socioeconomic objectives set out by the European Union, such as fostering the development of less favored regions; improving European transport and telecommunication infrastructure; protecting the environment; supporting the activities of SMEs and assisting urban renewal. In general, projects financed by the EIB must promote growth, competitiveness and employment in Europe. The EIB website contains information on upcoming tenders related to EIB-financed projects.

The EIB also presents attractive opportunities to U.S. businesses, as EIB lending rates are lower than most other commercial rates. Like all EIB customers, however, U.S. firms must use the loan proceeds for projects that contribute to the European objectives cited above.

The U.S. Mission to the European Union in Brussels has developed a database to help U.S.-based companies bid on EIB public procurement contracts in non-EU countries. All the tenders in this database are extracted from the EU’s Official Journal. The EIB database contains, on average, 50 to 100 tenders and is updated twice per week.

Multilateral Development Banks
Spain does not borrow from Multilateral Banks.



 

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.