Sent July 25, 2022, 5:21 pmUpdated July 25, 2022 at 5:30 pm
It is time to take stock of State Guaranteed Loans (PGEs), which have ceased to be marketed since June 30th. And it is generally positive, according to the Court of Auditors.
In a report published on Monday, the institute acknowledges that the system put in place in March 2020 to support businesses in the health emergency was implemented particularly quickly in France, thanks to the choice of its distribution by banks and the demand. online of a warranty certificate from Bpifrance. What to avoid a tightening of corporate credit.
“Of the 137 billion euros of PGE granted by banks to over 660,000 companies in December 2021, over 70% had been granted in June 2020”, notes the Court of Auditors. Highly in demand in the most fragile sectors, they have allowed to support a large number of viable companies and avoid massive bankruptcies. The share of “zombie” companies among the beneficiaries remained limited, at less than 2.5%.
Increase in tariffs
The sharing of risks between banks and the state, which guaranteed between 70% and 90% of the loan amounts, also proved to be fairly balanced, according to the institute. The cost of the PGEs for the State should therefore amount to less than 3 billion euros, while they have made it possible to support approximately 700,000 companies for a value of 140 billion euros.
The Court of Auditors, however, calls for vigilance in an economic environment that could deteriorate. Between the financial fragility of a number of beneficiaries and the rise in interest rates, the cost of refinancing PGEs, whose interest rates are fixed, could reduce banks’ margins and weigh on forecast results. The credit broker, Frédéric Visnovsky, warned, in an interview with AFP, that the default rate of 3.1% maintained so far would be revised upwards, “but in proportions that have nothing dramatic”.
The situation of individual entrepreneurs should also be closely monitored (3% of PGE in amount but 19% of beneficiaries) who have often pledged their personal assets.
The Court of Auditors also recommends establishing permanent real-time monitoring of the situation of companies’ bank accounts in order to improve knowledge of their cash flow.
Check the commitments of large companies
Another black point, according to the rue Cambon institute: the control of the commitments made by large companies to underwrite their PGEs. Unlike other countries, France has chosen a single system, regardless of the size of the company.
These commitments are not trivial. They go so far as to prohibit the payment of dividends or the repurchase of shares in the year in which the PGE is granted and require companies to respect the contractual payment deadline for their suppliers. However, payment times in France remain “significantly longer than the average times observed with some partners” in Europe, deplores the Court.
And if the commitments of large companies in which the state is a shareholder are closely monitored by the state holding agency, those of other large companies are not. The Court of Auditors therefore recommends effective monitoring of these commitments as well as clarification of the consequences of non-compliance.