The “InnoEmpresa” Program to Support Innovation at Small- and Medium-sized Enterprises (2007-2013), which constitutes the main tool for supporting SMEs, incorporates significant improvements, including most notably the prioritization of aid lines directly related to improving the innovative capacity of enterprises (in a broad rather than a purely technological sense), the opening of all envisaged aid lines at the direct request of the SMEs, an increase in the maximum aid for investment in tangible or intangible assets, a specific focus on projects to be implemented by different companies and agencies under a collaboration or consortium arrangement, etc.

With a budget of €500 million for the 2007-2013 period, the InnoEmpresa Program also receives co-funding from the European Regional Development Fund (ERDF) of approximately €105 million, and further financing from the Autonomous Community Governments that so desire, within the framework of the SME Industry-wide Conference.

The aid lines envisaged in the InnoEmpresa Program are classed in three groups: (i) Organizational Innovation and Advanced Management; (ii) Technological Innovation and Quality (iii) Innovation projects under collaboration arrangements.

SMEs belonging to the following industries are eligible for the aid granted under the InnoEmpresa Program: (i) industry, including agrofood; (ii) construction; (iii) tourism; (iv) businesses; and (iv) services, as well as the so-called “intermediary bodies” (i.e., public or private non-profit organizations which habitually provide services supporting innovation at SMEs and which have sufficient material and human resources) which pursue activities supporting SMEs in the foregoing sectors.

During the first two quarters of 2011, the Autonomous Communities are expected to publish calls for aid applications for regional projects under the InnoEmpresa Program, the management of which has been entrusted to them.

In turn, projects of a supra-regional nature (involving enterprises from various Autonomous Communities) are included in the National Program for Innovation Projects, specifically, in the Instrumental Action Line for R&D&I projects.

In addition to the InnoEmpresa Program, SMEs may be eligible for other aid instruments, including most notably (i) the Línea ICO-Sustainable Investment, (ii) the Línea ICO-Internationalization, (iii) the Línea ICO-Investment, (iv) Línea ICO-Liquidity and (v) Línea ICO-Housing.

In 2011 the second call for applications under the Program to foster “business angels” networks is to be published, the purpose of which is to help innovative SMEs obtain financing from the private investors operating in those networks. “Business angels networks” refers to organizations whose objective is to group private investors together, serving to intermediate between them (as potential suppliers of capital) and the financing demands of companies needing resources in order to undertake innovative projects.

With this aid, the Ministry of Industry, Tourism and Trade, through its Directorate-General of SME Policy, intends to bolster the provision of services by “business angels” networks, helping to make them more professional and to regularize the intermediation between SMEs needing capital in order to undertake innovation projects and the “nearest investor” or “Business Angel” potentially interested in financing those projects.

The most recent news is that on January 14, 2011 the Council of Ministers approved the 2011 Plan to Support Entrepreneurship, aimed at bolstering the initiative of entrepreneurs and the formation of enterprises, which is expected, on the whole, to mobilize a total investment of €300 million to facilitate the formation and consolidation of approximately 5,000 new enterprises.

This Plan consolidates, inter alia, initiatives such as the “Business Continuity Plan” or the “Credit Line for Young Entrepreneurs”, started up in 2010, and incorporates new initiatives such as the “Program of Bank Guarantees for Entrepreneurs”:

• The Business Continuity Plan, set up as a measure principally aimed at facilitating the transfer of SMEs in danger of disappearing for reasons other than those which are merely economic (i.e., the owner’s retirement, a partner’s health problems or death, a lack of successors, etc.).
• In 2010 this Business Continuity Plan was set up as a pilot initiative to be implemented in conjunction with 11 Chambers of Commerce with a line of credit endowed with a maximum of €20 million managed by the National Innovation Enterprise (Empresa Nacional de Innovación or ENISA). This line of financing is to be maintained in 2011 to support the entrepreneurs acquiring the enterprises transferred under the Plan, and the network of experts providing support in the transfer processes is to be extended, which will permit a greater presence of the industrial sector among the enterprises participating in the program.
• The Credit Line for Young Entrepreneurs started up by ENISA with a view to stimulating the formation of enterprises backed by young entrepreneurs, facilitating access to preferred financing with the sole guarantee of their business project, is renewed in 2011.
• The Program of Bank Guarantees for Entrepreneurs establishes a new incentive scheme aimed at activating the complete participation of the Reciprocal Guarantee Companies associated therewith and has a specific technical provisions fund endowed with €15 million at the Spanish Counter Guarantor Company (Compañía Española de Reafianzamiento or “CERSA”). Under this Program the CERSA will bear 75% of the risk of the guarantees provided by the Reciprocal Guarantee Companies associated with the Program to entrepreneurs who decide to start up their own businesses in 2011, or already did so in 2009 and 2010.

For further information, visit the extended version of our online Guide to Business:

Investment aid and incentives in Spain

Prepared by Garrigues

Last updated: 28|06|2011