Cash flow issues? The Spanish Govt can help!


Posted and filed under Businesses in Spain.

cash flow issues

Are you a business with cash flow issues arising from the covid pandemic? The EU is providing grants for business owners who lack liquidity. This article is for you.

Companies are struggling to pay their debts

Small and medium sized companies are struggling to pay their debts- A new grant released June 7th 2021 can help. 

Good news. According to the regional press, the application for the new grants coming from the European Union will be issued this week starting on the 7th of June.  From first glance it looks good. 

Companies with cash flow issues, who cannot pay their facturas from 2020 can receive up to 40% of the value of their outstanding debt. 

The terms and conditions of the grants will be the ones according to Royal-Decree 5/2021. As we informed on due time from 347 Asesores. (thanks to Rafa in 347 for putting this together for us) 

Grants cover most of the most common businesses in our society.  

It is of the utmost importance to point out that the grants will be aimed at paying the fixed costs of a firm. These costs can be leases, salaries, electricity supplies, or debts towards suppliers which were due from the 1st of March 2020 to the 31st of May 2021.

(You cannot suddenly invent unpaid invoices and hope to get a grant for them!!) 

Due to the large number of applications expected 347 cannot guarantee that the applications will be successful. This is going to be manic for a few weeks. 

Our advice, if you are interested, and if you think you are eligible, is to contact us as soon as possible. 

The terms are not crazy. 

Remember this is effectively free money from the government.  


The most important requirement is that your company cannot have debts with the Tax Offices or Social Security. You need to keep on top of your Spanish tax- more proof here! 

If your application is successful, you must follow a few rules:

  • You have got to maintain the social activity regarding the aids until 30th June 2022.
  • Can’t increase your own personal dividends. Or drawings for the next year nor invent a dividend that you feel you should pay yourself with government aid! So, no dividends during 2021 and 2022.
  • You should not even think about increasing the salary within the board of directors over a period of two years from the application of any of these measures.

Amounts of grants available. 

It is a little complicated, and again remember that you must have seen a drop in profits between 2019 and 2020. 

Here is a rough indication however: 

  1. 3000 euro in the case of entrepreneurs or professionals applying the objective estimation regime (modules). In the Personal Income Tax (IRPF).
  2. For those entrepreneurs or professionals whose declared volume of operations (or verified by the Spanish Tax Agency) per year, regarding the Value Added Tax or any equivalent indirect tax, have decreased by more than 30% in the year 2020 in relation to 2019, the maximum aid granted shall be:

The 40% of the volume of operations drop in the year 2020 in relation to 2019 provided that such 30% shall be exceeded. In the case of entrepreneurs or professionals applying the direct estimation regime in the Personal Income Tax. As well as permanent entities and establishments having up to 10 employees.

The 20% of the amount of the volume of operations dropped in the year 2020 in relation to 2019 provided that such 30% shall be exceeded. In the case of permanent entities and entrepreneurs, or permanent professionals and establishments having more than 10 employees.  

In both cases, grants shall be bound to an economic limit that shall not be less than 4,000€ or more than 200,000 €. 

Just to clarify, if your business earned for example 100,000 less in 2020 than in 2019, you may be entitled to receive 40% of that figure, (ie 40,000) to pay outstanding debts. This is quite substantial. 

How to apply and solve the Cash flow issues?

The application costs us around100 euro to process. And if you are successful the report we need to prepare will cost 300 plus VAT. (only if you are approved will we charge that amount). 

It looks like estate agents are not allowed to apply, if they do, it is unlikely they will be successful; Everyone else though appears to be eligible. If you are having cash flow issues, you absolutely need to take advantage of free money.

Get in touch and we’ll help you with the application process. 

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