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European green light for French participatory loans, a new tool for recovery

2021-03-04T10:26:08.135Z


20 billion euros will be mobilized in France to allow companies to "restart quickly and strongly". The European Commission has validated the French system of participatory loans for companies, she announced in a press release on Thursday, when the Minister of the Economy Bruno Le Maire presented this new support tool that he considers " key ”For the revival of the economy. "The key is to give our companies the opportunity to restart quickly and strongly and therefore the possibility of investi


The European Commission has validated the French system of participatory loans for companies, she announced in a press release on Thursday, when the Minister of the Economy Bruno Le Maire presented this new support tool that he considers "

key

”For the revival of the economy.

"The key is to give our companies the opportunity to restart quickly and strongly and therefore the possibility of investing".

Bruno Lemaire

"

The key is to give our companies the possibility of restarting quickly and strongly and therefore the possibility of investing

", defended the minister, adding that the "

watchword of the year 2021 must be investment

" .

Read also: Latest closings for equity loans

As already announced, the objective is to mobilize 20 billion euros via equity loans or subordinated bonds.

They are both considered quasi-equity because they are spread over a relatively long period and their repayment does not have priority over other receivables.

"

It is an absolutely massive contribution

" to the financing of companies, likely to "

change the game on investment

" in France, said the minister.

Terms and conditions of eligibility

These loans will have to be repaid over eight years, with a grace period of four years before the start of repayment.

The bonds will have to be repaid after eight years.

To reduce the risk for the banks and management companies that will distribute these two products, the State will provide a guarantee of up to 30% of capital losses, or 6 billion euros.

The loan amount may reach 12.5% ​​of 2019 turnover for small and medium-sized enterprises (SMEs), and 8.4% of turnover for medium-sized enterprises (ETI).

To have access to it, an SME will have to prove a turnover of more than 2 million euros.

Companies already supported via a state guaranteed loan (PGE) "

will also be perfectly eligible

", but they will be able to borrow a little less (10% of their 2019 turnover for an SME and 5% for an ETI).

Amounts assimilated to State aid

These amounts were difficult to negotiate with Brussels, which was to give the green light to this device, assimilated to State aid.

If the rate of these loans will be determined with the banking players, the minister estimated that it should be “

between 4 and 5.5%

”, for SMEs, and a little more for mid-sized companies, “

because the guarantee of the state is a little more expensive

”, again at the request of Brussels, detailed Bruno Le Maire.

The first equity loans will be distributed in early April, said the minister, and until June 30, 2022.

Source: lefigaro

All business articles on 2021-03-04

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