trade unions and companies warn of the risk of bankruptcy –

As the macroeconomic situation continues to deteriorate, unions are warning of the difficulties some companies are facing in repaying their state-guaranteed loans (PGE) and URSSAF charges. The risk of serial business failures is higher than ever.

The message was clear from the early days of the health crisis: to maintain corporate cash flow despite the pandemic, at all costs. On March 17, 2020, Economy Minister Bruno Le Maire announced € 300 billion of state guarantees on bank loans, ” which means that banks today no longer have any reason to refuse any loan to any company “.

Two years later, in December 2021, € 137 billion in PGE was granted to over 660,000 companies, according to a tally by the Court of Auditors. 88% of subscribers are very small businesses (TPE).

While the device has been able to keep many businesses afloat, many are now struggling to repay this PGE, whose first repayment installments began in May 2022.

Reimbursement [du] the surplus of net debt generated by the health crisis and by the subscription of the PGE is subject to the good recovery of economic activity. However, at the end of 2021, the return to growth in the course of 2021 seemed mixed for the beneficiaries of the PGE », Underlines a report of the Court of Auditors, published at the end of July.

The problem is record inflation, driven primarily by rising energy prices and supply chain disruptions.

The war in Ukraine since February 2022 and the increase in the minimum wage of about 3% since the beginning of the year are also factors that put at risk the economic health of some companies that have signed a PGE.

“From 20 to 30% of TPE in difficulty”

Between the reimbursement of the PGE and the charges of the URSSAF, companies have to pay an average of 900 euros more per month “, Analyzes Jean-Guilhem Darré, general delegate of the Union of self-employed workers and VSE (SDI), for EURACTIV.

It is an impossible mission for some of them, especially in catering and tourism. The macroeconomic context does not allow for a return to normal for their activities.

The Court of Auditors explains that: the companies that used the scheme were in a slightly more difficult financial situation than the average firm before the crisis “.

The SDI, in fact, warns against the risk of bankruptcy, if the State does nothing to support the companies most at risk.

The union is based on the July 2022 statistics from the Banque de France (BDF), which point out that 34,653 companies closed their doors in one year. If that number stays below the 2019 figures, before the pandemic, they are up 23.1% compared to July 2021.

We estimate that 20 to 30% of VSEs are in difficulty, or between 120,000 and 180,000 companies. If nothing is done, I don’t think they will last more than six to eight months. “, Explains Mr. Darré. ” I have lost count of the number of business executives who have stopped paying their salaries in order not to reduce their cash flows. “.

Indifferent public authorities

However, public institutions don’t seem worried. The Court of Auditors estimates that the probability of default will remain limited, “ between 3.1% and 4.2% “, While the BDF provides for 4.6%.

Contacted by EURACTIV, the Ministry of Economy agrees: we did not see any significant increases in claims while nearly three-quarters of companies that have signed up for a PGE are now required to repay.

For companies most at risk, recourse to the credit broker of the BDF is envisaged: this is the meaning of the agreement between the Ministry of Economy, BDF and the French Banking Federation signed in February, which allows small companies that have signed a PGE of less than 50,000 euro and in financial difficulties to spread the repayment.

The use of mediation is very positive for the company because it benefits both from the restructuring of the PGE and other bank debts, and from an agreement on short-term financing, which allows it to secure liquidity in the coming years “, Analyzes Frédéric Visnovsky, national credit broker at the BDF.

Existing but contested solutions

Mr Darré does not share this opinion. For him, “sFollowing the mediation, the company was declared in default by the Banque de France, which made it particularly difficult to access new loans. Business leaders are reluctant“.

When you default, credit insurers pull out, which means you have to pay your suppliers immediately and that only makes the situation worse. “, Also put forward François Asselin, president of the Confederation of SMEs (CPME), in the columns of Southwest end of July.

A reality that could explain the low number of cases filed with the mediator: 304 from February 2022, while PGE 288,000 begin to be repaid.

The fear of the default declaration may partly explain the low utilization of the device Visnovsky admits to EURACTIV, but the lack of knowledge of the rules by companies is also evident: ” if a company is unable to guarantee the repayment of its PGE maturities (or other bank debts), it will be declared in default even without restructuring, so it has every interest in using the system “.

Unions are still hoping for new measures to make repayment obligations more flexible and intend to influence the debates around the Finance Bill (PLF) and the Social Security Financing Bill (PLFSS).

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