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11th January 2019
Santander creates EUR620m fund to finance business growth
Santander is to offer a new fund, Fondo Smart, endowed with EUR620m to provide loans to finance long-term business growth. This new fund is the largest private debt fund in Spain and offers businesses a new financing alternative for projects that boost growth, sustainability, innovation, digitalisation and create jobs. This new fund updates the Fondo Advance, which was introduced in 2014.
The new Fondo Smart, is broken down into three lines depending on the development phase of the projects:
• Fondo Smart Impulse is for the rapid expansion or post-start-up phase: This EUR20m fund is intended for companies with annual billing of up to EUR3m, revenue that is growing exponentially and need a maximum of EUR2m in financing for up to five years. The fund will invest in these companies, mainly via ordinary or subordinate debt, although other formulas are also envisioned such as convertible financing.
• Fondo Smart Growth for the growth or SME phase: This is the evolution of the Fondo Advance fund and is expanded to EUR500m. It is designed for companies with billing of between EUR3m and EUR100m that register EBITDA growth and need financing for between EUR1m and EUR15m and a maximum ten-year term. This instrument will be available via ordinary or convertible debt.
• Fondo Smart Progress, for the consolidation or post-SME phase: This fund makes EUR100m available for consolidated enterprises with annual billing of between EUR10m and EUR100m, profitable growth and need between EUR1m and EUR10m over a ten-year term. Financing will be provided to SMEs through ordinary or sub-ordinate debt.
The structure of the financing will be flexible and based on the needs of companies. The Fondo Smart will also allow companies to focus on sustainable growth, pursue high impact projects and take advantage of advisory services related to financial and non-financial solutions.
Rami Aboukhair, country head of Santander España, said: “With Fondo Smart we help fulfil our purpose as a responsible bank that helps businesses prosper and reinforce our long-term relationship with clients. We accompany businesses as they grow and make strategic financing available to them to boost projects that support sustainable growth, innovation, digitalisation and generate employment.”