ICO Spain: Government Financing for Business Acquisitions

The Instituto de Crédito Oficial (ICO) is Spain's state-owned development bank, providing financing programs that can be used for business acquisitions. Founded in 1971, ICO has deployed over €150 billion in cumulative financing to Spanish businesses. For searchers targeting Spanish acquisitions, ICO loans offer competitive terms and favorable conditions that can significantly reduce the cost of acquisition financing.

The primary ICO program relevant to business acquisitions:

• Loan amount: Up to €12.5 million per client per year
• Term: 1-20 years (including grace period)
• Grace period: Up to 3 years for principal payments
• Interest rate: Fixed or variable, set by the intermediary bank within ICO-established maximums
• Use of proceeds: Business acquisitions, productive investments, working capital
• Application: Through any accredited commercial bank (Santander, BBVA, CaixaBank, etc.)

ENISA provides participative loans (préstamos participativos), a uniquely Spanish instrument:

• Amount: €25,000-€1.5 million
• Structure: Subordinated loan with interest tied to company performance
• No collateral: No personal guarantees or collateral required
• Counts as equity: Under Spanish law, participative loans count as net worth for capital adequacy
• Term: Up to 9 years with up to 7-year grace period
• Best for: Younger entrepreneurs and innovative business models

For technology-related acquisitions, CDTI provides:

• Loans for R&D and innovation projects
• Favorable terms: low interest rates, long grace periods
• Can fund technology integration post-acquisition

Spain's autonomous communities offer additional financing:

• Catalonia: IFEM (Institut de Finances de Catalunya) and Avális SGR guarantees
• Basque Country: SPRI group and Elkargi mutual guarantee society
• Madrid: Avalmadrid mutual guarantee society
• Andalusia: Idea Agency programs
• Valencia: IVF (Institut Valencià de Finances)

Mutual guarantee societies (Sociedades de Garantía Recíproca or SGRs) are particularly useful, they provide guarantees to banks, enabling better loan terms for acquisitions. According to CESGAR (the Spanish confederation of SGRs), these societies guaranteed over €5 billion in outstanding loans in 2023, with default rates significantly below the SME average.

• Senior bank debt (ICO-backed): 40-50% of deal value
• Vendor loan: 15-25%
• ENISA participative loan: 10-15%
• Buyer equity: 20-30%

Spain’s corporate tax framework includes several features relevant to acquirers. For a deeper look at entity structuring, see our SL vs. SA Spain guide:

• Corporate tax: 25% standard rate; 15% for the first €300K for new companies in first 2 years
• Goodwill amortization: Tax-deductible over 20 years (5% annually). See our goodwill amortization guide for cross-country comparison
• Interest deductibility: Limited to 30% of EBITDA
• Transfer tax (ITP): 1-6% on share transfers depending on region

• ICO provides up to €12.5M in acquisition financing through commercial banks
• ENISA participative loans count as equity and require no personal guarantee
• SGRs (mutual guarantee societies) improve bank lending terms significantly
• Goodwill amortization provides meaningful tax benefits for acquirers
• Regional programs add another layer of financing options

Yes. The ICO Empresas y Emprendedores line specifically covers business acquisitions (adquisición de empresas) as an eligible use of proceeds, alongside productive investments and working capital. You apply through any accredited commercial bank (Santander, BBVA, CaixaBank, etc.), not directly from ICO. Loan amounts can reach €12.5 million per client per year with terms up to 20 years.

ENISA participative loans are subordinated loans of €25K-€1.5M with interest tied to company performance. Under Spanish law, they count as net worth (fondos propios), which means they strengthen the company’s balance sheet rather than adding conventional debt. They require no personal guarantee or collateral and offer terms up to 9 years with up to 7 years of grace. This makes them ideal for supplementing acquisition financing, particularly for younger entrepreneurs who may lack personal collateral.

SGRs act as guarantors to commercial banks, covering a portion of the loan risk. When you bring an SGR guarantee, banks can offer lower interest rates (typically 0.5-1.5% less), reduced collateral requirements, and longer repayment terms. The cost of an SGR guarantee is typically 0.5-1.5% annually on the guaranteed amount. Each autonomous community has one or more SGRs, so contact the one in the region where the target business operates.