Econostrum | Economic News in the Mediterranean

EIB and Santander join forces to provide €2bn to companies affected by the crisis

Written by Eric Apim on Tuesday, June 22nd 2021 à 14:45 | Read 520 times

The Spanish bank Santander was the first financial intermediary to offer companies early payment of their supplier invoices (photo: F.Dubessy)
The Spanish bank Santander was the first financial intermediary to offer companies early payment of their supplier invoices (photo: F.Dubessy)
EU. The European Investment Bank (EIB) and the Spanish bank Santander signed two agreements on Monday 21 June 2021 under the European Guarantee Fund (EGF). The two partners will open credit lines reserved for the early payment of suppliers and thus "support companies affected by the COVID-19 crisis", as they state in a joint press release.
The EIB is providing two guarantees of up to €500m to help businesses of all sizes through reverse factoring solutions that allow early payment of invoices to suppliers, mostly SMEs, without the need to use their cash flow. Customers will avoid late payments. "The health crisis caused by COVID-19 has once again highlighted the key role played by financial institutions in providing liquidity to small and medium-sized enterprises and large multinationals to enable them to maintain the flow of funds into their supply chains and cushion the impact of this crisis", said José M. Linares, Global Head of Santander Corporate & Investment Banking.

Santander adds another €1bn

The first guarantee will be dedicated to activities located in Spain, the second to companies located in France, Italy, Germany and Austria. For its part, Santander is adding an additional €1 billion to the Spanish and European companies. "Thanks to these agreements, SMEs, mid-caps and large companies will benefit from greater liquidity and will be able to protect jobs, with a positive impact on the entire supply chain. Santander, a leading trade finance bank, has been a pioneer in promoting financial support for companies in the form of advance payments to suppliers”, the statement said.
"Agreements like this are essential to solving the liquidity problem and to reducing the volume of advance payment requests, thus boosting productivity and safeguarding jobs in Spain and Europe", commented EIB Vice-President Ricardo Mourinho Félix.


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