Access to state-guaranteed loans was due to end on December 31, 2020. In the wake of the French President's announcement of curfews in several French cities, the Minister of the Economy and Finance indicated that the scheme would be extended until June 30, 2021.
New health measures exacerbate difficulties for businesses
On Wednesday, October 14, 2020, Emmanuel Macron announced the implementation of new measures to slow the Covid-19 epidemic. A night-time curfew, from 9 p.m. to 6 a.m., has been introduced throughout the Paris region and in 8 French metropolises.
As a result, many businesses, including restaurants and bars, are once again facing a brutal loss of sales. Aware of these difficulties, the government has announced the reinforcement and extension of a number of schemes to help threatened businesses, including the state-guaranteed loan (PGE).
In addition, French Finance Minister Bruno Le Maire has asked the French Banking Federation " to examine the possibility of deferring repayment of these loans for a further year for companies that really need them ", stating that " flexibility " should be " the rule ".
The Minister thanked Philippe Brassac, Director of the French Banking Federation since September 1, 2020, " for his understanding of the subject ".
Other schemes, designed to support businesses over the longer term, have also been the subject of discussions between banks, businesses and the government. These include equity loans.
In a press release dated October 19, the FBF referred to " a system of equity loans, issued by banks and supported by the State, as part of the recovery plan ". These participatory loans will be available from the first quarter of 2021, guaranteed by the State and " aimed at SMEs and ETIs with potential, but whose structure has been weakened by the crisis ".
Who can benefit from a government-backed loan?
The state-guaranteed loan scheme is open to all companies, whatever their size, activity or legal form, with the exception of credit institutions and finance companies.
The amount granted can be up to three months' sales for 2019, or up to two years' payroll for startups, as well as for companies created since January 1, 2019.
The loan is 90% government-backed, and 70-80% for companies with over 5,000 employees or sales in excess of €1.5 billion.
To date, 590,000 companies have benefited from a state-guaranteed loan, for a total amount of 122 billion euros.