November 30, 2021

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Recovery plan: 100 million euros in participatory loans for very small businesses

The State is supplementing its arsenal of anti-crisis measures to help businesses. From this Wednesday, October 13, 2020, it will start granting equity loans to small businesses that have failed to obtain State Guaranteed Loans (PGEs) from their bank or for which this funding is not sufficient. .

The envelope of this device can reach up to 100 million euros, and will be drawn from the billion euros of the economic and social development fund (FDES), already voted in the amending finance bill of April. latest.

These loans are intended for companies with less than 50 employees, whose activity has been weakened by the context of the health crisis, and which are struggling to find funds to revive. Indeed, if the EMP has been distributed on a massive scale since the end of March, with to date 588,000 beneficiaries for an amount of 121 billion euros, around 2.7% of loan applications were refused by banks, according to the count made by Bercy, a little more than 16,000 companies. They could be among the candidates for these equity loans.

A rate of 3.5% over seven years

The average loan amount is expected to range from between 20,000 euros (for companies with less than 10 employees) and 50,000 euros (for those with less than 50 employees), we estimate on the side of Bercy. Exemptions of up to 100,000 euros will be granted on a case-by-case basis. After a request from the Departmental Committee for the Examination of Business Difficulties (Codefi), businesses will be able to apply for a loan on a digital platform, developed and managed by bpifrance. An answer will be given within two weeks.

These loans will be granted for a period of seven years, at a rate of 3.5%, with the reimbursement of only interest in the first year. The bill is therefore higher than that of an EMP, whose rates vary between 1 and 2.5% depending on the duration of the loan. ” It is more expensive than an EMP, but it is not the same status. These loans are assimilated to equity and also make it possible to rebalance the balance sheet “, We remind Bercy.

This type of loan is also more risky because it is subordinated to all other debts, and therefore repayable last in the event of difficulty. In total, this solution must allow companies that are already highly indebted to obtain financing in spite of everything. ” These exceptional loans from the State, by providing quasi-equity, will strengthen both the cash flow and the financial structure of these companies. “.

No sector is targeted for the moment, but the hotel and catering industry could be the first applicants for these participatory loans. It remains to be seen how much this could cost the State, which already offers since this summer, repayable advances and loans at subsidized rates to SMEs withheld by their banks, and which is not necessarily intended to remain in the capital of several thousand very small businesses. Bercy has not made a simulation on a possible default rate. The situation will be assessed over the weeks and the granting of loans.