State-guaranteed bank loans: already 21,000 LégiFiscal requests

Bruno Le Maire announced this morning that requests for state-guaranteed bank loans to cope with the economic consequences of the coronavirus had already reached 3.8 billion. 21,000 companies have applied.

€ 300 billion in guaranteed bank loans ¶

To address the containment measures, Emmanuel Macron announced on March 16 the institution of a bank guarantee of up to 300 billion euros. This system was put in place on March 25 and is currently open until December 31, 2020.

All companies, regardless of their size, activity or legal form, can access this guarantee, with the exception of SCIs and credit institutions.

This guarantee concerns loans requested from the company’s usual bank, under the following conditions:

  • The loan amount must represent a maximum of 3 months of turnover in 2019 or 2 years of paycheck for innovative companies or companies born from 1uh January 2019
  • The loan does not have to provide for any repayment in the first year
  • The loan must allow the company to choose the repayment over a maximum period of 5 years.

Already a success¶

Bruno Le Maire, Minister of Economy and Finance spoke this morning to Radio Classique on this device. It is already a success as 21,000 applications have already been received representing € 3.8 billion of secured loans.

Excerpt from the Bruno Le Maire announcements Tuesday 31 March, Radio Classique

As I speak to you, we already have € 3.8 billion in loan applications. […] This is proof that we hit the mark: the first problem for French companies was a cash flow problem.

At the moment, the average amount of guaranteed loans granted by the state is 135,000 euros. The average loan request is € 180,000.

However, the Minister underlined the unacceptable practices of some credit institutions by asking the managers of some SMEs to pledge their personal assets as collateral for the loan. He then announced that the French Banking Federation was in contact with his services to resolve these situations.

The application procedure ¶

The entire procedure for accepting and processing applications is managed by Bpifrance. There are 2 procedures:

  • For companies with fewer than 5,000 employees and turnover of less than € 1.5 billion: automatic acceptance if the company meets the eligibility requirements
  • For other companies (large companies): an education by the Directorate General of the Treasury assisted by Bpifrance is required.

For large companies, the guarantee is granted by order of the Minister of Economy and Finance. If for the moment no large company has yet made use of the state guarantee, Bruno Le Maire has announced that he will refuse to sign the decree for those who do not show restraint in terms of dividend payments.

The application procedure is developed in the brochure made available “Support measures and contacts”

Extract from “Support measures and contacts” (pages 9 and 10)

How to take advantage of it?

  • For companies with fewer than 5,000 employees and with a turnover of less than 1.5 billion euros in France:
  1. The company turns to a banking partner to apply for a loan. You can apply for a group of multiple loans. The cumulative amount of these loans must not exceed 25% of turnover or 2 years of paycheck for start-up or innovative companies
  2. After reviewing the company’s situation (especially the eligibility criteria), the bank issues a pre-approval for a loan
  3. The company connects to the attestation-pge.bpifrance.fr platform to obtain a unique identifier that it communicates to its bank, providing for this purpose its SIREN, the amount of the loan and the name of the bank branch. During the first month of the system, the company will be able to obtain only one unique number, so it requests it only after obtaining a pre-approval from the bank.
  4. Upon confirmation of the unique number by Bpifrance, the bank grants the loan

In case of difficulty or refusal, the company can contact Bpifrance at the following address: supportentrepriseattestation-pge@bpifrance.fr.

  • For companies that employ at least 5,000 employees or have a turnover exceeding € 1.5 billion in France :
  1. The company turns to its banking partners to apply for a loan and gets their pre-approval

  2. The company sends its request to: garantie.etat.grandesentreprises@bpifrance.fr

  3. The file is examined upon receipt for the State by the Directorate General of the Treasury supported by Bpifrance Financement SA

  4. The State guarantee is granted by individual order of the Minister of Economy and Finance

  5. The banks can then grant the loan to the company

Source: https://www.economie.gouv.fr/files/files/PDF/2020/Coronavirus-MINEFI-10032020.pdf

Further details are also available in the dedicated press kit: https://www.economie.gouv.fr/files/files/PDF/2020/dp-covid-pret-garanti.pdf

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