Tourism: government-backed loans with higher ceilings

Hard hit by the crisis, the tourism sector is set to benefit from a 1.3 billion euro investment plan and a number of government aids. These include the State Season Loan. Modelled on the guaranteed loans distributed since the start of the health crisis, it has a higher ceiling and allows more borrowing.

State-guaranteed loan season

Offered by banks to French companies since the end of March, state-guaranteed loans may not exceed 25% of annual sales.

The State Guaranteed Seasonal Loan, or PGE saison, or PGES, which is specifically aimed at the tourism and hotel industries, is capped at sales for the best three months of the previous year. Given the highly seasonal nature of these sectors, these three months can represent 70% to 80% of annual sales, representing a much higher borrowing capacity. What's more, banks systematically offer SMEs in the tourism and hotel sectors a 12-month deferment of monthly payments on all their potential loans, instead of 6.

The Banque Publique d'Investissement has considerably increased the budget allocated to the tourism sector, from €250 million to over €1 billion. By mid-May, 80 million euros had already been released for the PGE saison. The tourism sector alone accounts for 2 million direct and indirect jobs, and generates almost 8% of the country's gross domestic product. The survival of this sector is therefore essential to the French economy.

Tourism businesses that have already obtained an EMP before the introduction of the Season EMP can obtain additional funding.

Other support measures for the tourism sector

Between the Banque des Territoires and Bpifrance, a total of 3.6 billion euros will be allocated to the tourism sector between now and 2023.

Companies in the tourism sector will continue to benefit from the short-time working scheme until the end of 2020.

The solidarity fund will also remain in place until the end of 2020. Previously reserved for VSEs, the professions, micro-entrepreneurs and the self-employed employing a maximum of 10 people and generating annual sales of up to 1 million euros, it has been extended to companies in the tourism sector employing up to 20 people and generating annual sales of up to 2 million euros. This measure also applies to companies in the events, sports and cultural sectors.

Tax exemptions for VSEs and SMEs in the tourism sector will cover at least the administrative closure period from March to June. In addition to these exemptions, employers will be entitled to a contribution credit equivalent to 20% of salaries paid since February.

Rents due during the administrative closure period are not deferred, but cancelled. Local authorities will be able to choose to reduce the amount of the business property tax (cotisation foncière des entreprises - CFE) and the tourist accommodation tax (taxe de séjour). The CFE payable by businesses in the tourism sector could be reduced by two-thirds, with half of the amount paid by the State.

Half-hearted support from insurance companies

Insurance companies, for their part, have disbursed a billion euros, in the form of commercial gestures and indemnity payments. However, the majority of insurers consider that current operating losses cannot be covered by their policies, which is causing considerable dissatisfaction among policyholders.

TheAutorité de contrôle prudentiel et de résolution (ACPR) will be conducting an investigation to shed light on the different types of contracts and guarantees on offer.