SMEs celebrate that Banco Nación has extended the productive financing term to 10 years, but warn that uncertainties need to be eliminated

Stock Photo – A man walks with his protective mask against COVID-19 in front of the central house of the Banco de la Nación Argentina in Buenos Aires. May 21, 2020. REUTERS / Agustin Marcarian

Banco Nación has extended the amortization terms of its credit lines to finance investment projects, both in pesos and in dollars, initially scheduled for a period of 3 to 5 years and will now be up to 10 years. In this context, The chambers that group SMEs highlighted the measure because they considered public banks’ support for production to be positive, although they warn that in many cases loans cannot be used because companies do not have a credit portfolio in order.

As reported by the financial entity led by Eduardo HeckerMicro, small, medium-sized companies and other companies in general will have a maximum term of up to 10 years in the financing products called Mipymes Credit Line and Corporate Credit, respectively.

“With this initiative by Banco Nación, we are following the policy of reducing rates and expanding the supply of credit to the productive sector and contributing to the economic reactivation plan launched by the National Government for the post-pandemic phase,” said Hecker in a note.

And I add: “Companies that decide to make and finance large investments will have adequate amortization terms that follow the flow of resources from companies”.

As explained by the Nation, credit lines with a maximum repayment term of 10 years will be subject to the study, analysis and calculation of the equity, economic and financial variables of each client who requests it. In turn, the financing of the Corporate Credit line, in dollar terms, which currently includes an amortization period of up to 3 years, has also been extended to 10 years.

For SMEs, credits must be accompanied by a tax package that gives them security to receive them. And they emphasize that even under favorable conditions, anyone who has tax debts or checks returned will not be entitled to the loan.

For Fabian Castillo, holder of Federation of Commerce and Industry of the City of Buenos Aires (Fecoba), there are two fundamental legs for SMEs. One is the credit system and the other is the tax system.

“Credit is very important, but it must be directed to the needs of each one. Credit for industry is not the same as for tourism or commerce. Credits cannot be used because many companies do not have a credit portfolio in order. SMEs go from moratorium to moratorium due to fiscal pressure. On the other hand, private banks have turned their backs on companies”, Castillo highlighted.

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Likewise, he added that the uncertainty also has to do with the current situation of small companies, which means that he is not sure about debt taking in this context of a pandemic.

I see very well that Banco Nación fulfills the objective of being the bank of Argentina. I think that this must be accompanied by an important tax package to give SMEs the security of access to these credits. If you owe taxes or returned checks, the qualification will not give you access to those credits. That is why I insist that credit is very important but must be accompanied by other measures aimed at the normalization of SMEs ”, he added.

For its part, Marcelo Fernandez, president of Business Confederation of the Argentine Republic (CGERA), I told Infobae who favorably view that “Banco Nación, a public bank that wants to support production, work and job creation, gives us longer terms for the purchase of capital goods or investment loans”.

Eduardo Hecker, president of Banco Nación.
Eduardo Hecker, president of Banco Nación.

While Matías Bolis Wilson, Head of Economics at the Argentine Chamber of Commerce (CAC), He said that the extension of deadlines should always be a relief for everything that is financing, but added that, on the other hand, there is a very high degree of uncertainty that requires attention.

If SMEs are able to repay long-term loans, but do not have the income to repay those loans, they will remain in trouble. They would be alleviating part of the problem, which is credit. Any extension of the credit term works, ”he said in statements to the Infobae.

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In this sense, he considered that expectations play a very important role for SMEs and consumers. “Companies can have long-term credit, but if the expectation is still negative, it is useless. When you build a company’s cash flow and it remains negative in the following months, I can make the decision to close beyond the extension of existing loans ”, he guaranteed.

He concluded: “Starting to coordinate expectations is very important at this moment and it is the great challenge that this government has. The length of the deadlines must be positive, but expectations must be coordinated so that many SMEs decide not to close.

Fees

It should be noted that these are lines of credit financed in tranches of R $ 5,000, with renewable quotas where the bank defines the renewal according to demand.

As for the interest to be applied to the Mipymes line, Badlar is used as a reference, the rate of remuneration for fixed terms over one million pesos, currently situated at around 30%. Thus, the rate for loans in pesos is Badlar + 6 percentage points, and in dollars Libor + 5 percentage points for full customers and Libor + 5.5 0 percentage points for non-full customers.

In the case of Corporate Credit Lines, the rate for operations in pesos is Badlar + 8 percentage points and, in dollars, Libor + 6 percentage points. In both cases, rates vary over the period.

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