Since March 25, 2020, companies impacted by the Covid-19 crisis have been able to obtain a state-guaranteed loan (PGE). In addition to acting as an intermediary between public authorities and commercial banks, Bpifrance intends to release 2 to 3 billion euros of PGE as a direct lender.
50 billion euros of EMP granted in April
More than 50 billion euros in state-guaranteed loans were granted to 322,000 companies between March 25 and April 30, according to the French Ministry of the Economy and Finance. Based on data supplied by the FBF, Banque de France and Bpifrance, Bercy states that the refusal rate concerned 2.4% of eligible applications. The majority of companies applying for government-backed loans were in the following sectors: vehicle repair (13.3 billion euros of outstanding loans), manufacturing (6.2 billion euros), scientific and technical activities (4.1 billion euros), accommodation and catering (4 billion euros).
Since May 7, new players have been eligible. These include companies in receivership since January 1, 2020, and certain non-trading property companies previously excluded. Participative financing platforms will also be able to grant EMPs. These measures are designed to anticipate a new wave of demand from businesses for guaranteed loans to cover their working capital requirements.
Bpifrance to market PGEs as a back-up to its Atout loan
The public investment bank aims to play a direct role in financing the cash flow of companies in difficulty, by launching EMP for its 80,000 active customers. Bpifrance plans to release an envelope of 2 to 3 billion euros, a limited amount which corresponds to one day's PGE from commercial banks, but which will save hundreds of very small businesses (representing 90% of its customers). The institution has already begun marketing state-guaranteed loans to startups, with a target of 300 to 500 million euros.
Although it has not yet received authorization to offer secured loans, Bpifrance, which operates under the status of a credit institution, has decided to use this leverage as a relay to its Atout loan. This unsecured loan is designed for VSEs, SMEs and ETIs with temporary cash-flow needs, or faced with an exceptional increase in WCR due to the economic climate. Since mid-March, this solution has financed small businesses to the tune of 3 billion euros. The Atout loan is less attractive for borrowers, however, as it carries a rate of 2.25%, compared with 0.25% or 0.50% for the PGE. In parallel, Bpifrance offers other investment channels, notably zero-interest rebound loans, guaranteed by the regions.