Launch of state-backed loans on Wednesday
The decree on the guarantee of the state within a total outstanding of 300 billion euros appeared in the Official Journal of March 24th, 2020. In a press release this morning, the Economy and Finance Minister, Bruno Le Maire, announced that the scheme would be operational tomorrow, Wednesday, March 25. These loans should help relieve the cash flow of businesses and professionals who are suffering the shock of the health emergency. "This mechanism embodies the general mobilization to support the French economy desired by the President of the Republic and confirmed by the unanimous vote of the amending finance law for 2020. It is the first of its kind in Europe to be approved by the European Commission in the framework adopted on March 19," Bercy said in a statement.
A clear and simple device open to all sectors of activity
The guarantee can be granted to loans made by credit institutions and financing companies, from March 16th, 2020 until December 31st, 2020 included, to non-financial companies registered in France. In practical terms, companies of all sizes, regardless of the company’s legal form (including companies, traders, craftsmen, farmers, liberal professions, associations and foundations with an economic activity), with the exception of civil real estate companies, credit institutions and finance companies, will be able to apply to their usual bank for a state-backed loan to support their cash flow.
These loans may represent up to 3 months of 2019 turnover, or two years of payroll for innovative companies or companies created since January 1st, 2019. The loans covered by the guarantee include a minimum amortization deferral of twelve months and a clause giving the borrower the ability, at the end of the first year, to depreciate them over an additional period calculated in number of years, depending on his choice and within a maximum of five years. "Banks are committed to reviewing all requests and giving them a prompt response. They are committed to massive distribution, at cost, of state-backed loans," the Ministry of Economy and Finance said.
Find all the practical information below
- Loan Terms: Download the state-backed Loan document
- The procedure: check the procedure for companies with less than 5000 employees
- Check out the questions/answers: download
- Website of the French Banking Federation
Your usual BDO contacts are at your side to accompany you in your loan application process.
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