MOJACAR councillors have approved the use of the 2014 budget surplus to reduce borrowings from the Instituto de Credito Oficial.
The town hall agreed to take out the loan in 2012 under a scheme set up by central government to regularise debts owed by local authorities to small and medium sized businesses.
In the case of Mojacar only one company was owed money.
Since then, regular payments have been made and the debt reduced by about €695,000.
In a statement the mayor of Mojacar said the municipal accounts showed the budgetary stability enjoyed by the town council, thanks to the good management of the governing team.