What do a taxi driver and the hub that Nissan is going to reindustrialize have in common? The two have obtained an endorsement from the semi-public company Avalis SGR, which is basically dedicated to insuring loans that traditional banks would not grant due to the high risk involved. And it does so for both self-employed workers and taxi drivers, as well as companies such as those that will industrialize the old Nissan space.
The mechanism is very simple. A client (self-employed or SME) requests a loan to carry out an investment or to have working capital. If the bank cannot grant the operation because there are not enough guarantees of collection, a guarantee is requested from Avalis. If this entity grants it, the client must pay a small entry commission (0.45% or 0.6%) and an annual interest rate (between 1% and 1.7%) in addition to entering as a shareholder in Guarantees with 3% of the guaranteed capital.
That is why the organization has a very fragmented shareholding. 27% is in the hands of the Generalitat and the Institut Català de Finances (ICF). Another 20% is in the hands of business groups such as employers. And the remaining 53% is capital from the companies that receive the guarantees. And in turn, a good part of the guarantees are refinanced by Cersa (Spanish refinancing company), dependent on the Ministry of Industry.
The company's capital plus reserves is 98.8 million while the guarantees granted amount to 581 million. Delinquency does not reach 11% while the real one –once recoveries have been discounted– is less than 4%. “We don't do white (good) operations that end up being covered by the bank, nor do black (bad) ones. Only the gray ones”, says Josep Lores, CEO of Avalis.
"Of everything that comes to us, 70% is usually approved," explains Lores. Avalis uses artificial intelligence tools to speed up the decision-making process on the projects it receives. This is the only way they can manage the thousands of requests that come to them. There are 42 people on the staff and only last year 1,750 operations were authorized. Of these, 60% were guarantees to carry out investments, 30% were to obtain working capital with which to operate and 10% to present to contests such as the one for the Nissan electromobility hub.
Lores assures that a part of the guarantees also go to startups, although it is capped at a maximum of ten million. “We entered phase II,” he says. In Catalonia, in addition to Guarantees, the ICF also grants guarantees. For this reason, the mutual guarantee society (SGR) is not the largest in Spain.
