More financing for small businesses and new crowdfunding rules

Automatic summary, not yet reviewed

1. If a bank wants to cancel or significantly reduce the credit it gives a small or medium-sized business (pymePyme Spanish term for a micro, small or medium-sized enterprise, under European Union criteria.), it must notify it in writing at least three months in advance. There are exceptions, for example if the pyme is in insolvency proceedings or has breached the contract.
2. In that case, the bank must deliver free of charge, within ten business days, a document called Información Financiera-PYME with the pyme's credit history, unpaid debts and risk rating. The pyme can also request it at any time, paying at most the cost of producing it.
3. The rights of small businesses against banks cannot be waived, and the Bank of Spain (Banco de España) supervises compliance. Breaching them is a serious infringement, or a minor one if occasional or isolated.
4. For the first time, a legal framework is created for equity crowdfunding platforms (plataformas de financiación participativa). These platforms must be authorized and registered with the National Securities Market Commission (Comisión Nacional del Mercado de Valores) and may only connect investors with project promoters; they cannot give advice or manage money.
5. Each project published on a platform cannot raise more than €2 million per year (€5 million if only accredited investors participate). A non-accredited investor cannot invest more than €3,000 in a single project or more than €10,000 per year on each platform.
6. Before investing, the platform must warn the investor about the risks: total or partial loss of the money, not getting the expected return and lack of liquidity. The investor must also confirm, in writing or through secure electronic means, that they have been warned.
7. The securitization regime is reformed: asset and mortgage securitization funds are unified into a single category, their operations are made more flexible, and transparency duties for management companies are strengthened, including annual and quarterly reports and disclosure of material events.
8. Companies' access to capital markets is made easier: limited liability companies can now issue bonds (with safeguards), the previous limit tying bond issues to equity is removed for public limited companies, and the move from a multilateral trading system to an official market is made more flexible.

Who it affects

• Small and medium-sized businesses and self-employed workers: They are entitled to three months' notice and free financial information if a bank cuts or ends their credit.
• Individual investors: They can invest in crowdfunding projects, with investment limits and mandatory risk warnings.
• Companies seeking funding: They can raise money through authorized platforms, issue bonds (including limited liability companies) and reach capital markets more easily.
• Banks and financial institutions: New information duties toward small businesses and a new regime for credit financial establishments.
• Crowdfunding platforms: They must be authorized by the CNMV, meet capital requirements and conduct rules, and can be sanctioned.

Words worth knowing

Flujo de financiación

The set of credit contracts that the same bank has granted to a small business.

Pyme

Spanish term for a micro, small or medium-sized enterprise, under European Union criteria.

Plataforma de financiación participativa

An authorized company that, through a website, connects people asking for money for a project with people who lend or invest it in exchange for a return.

Inversor acreditado

Accredited investor: one with enough experience, income or wealth, who receives fewer protections because they are presumed to understand the risks.

Titulización

Securitization: pooling loans (for example, mortgages) into a fund and issuing bonds backed by that fund for investors to buy.

It summarizes the law as published in the BOE. It is written by artificial intelligence and may contain mistakes: the official text is what counts. Read the official text · How we make summaries