PGEs were granted en masse in 2020. According to Bercy's latest count in mid-December, the amount of loans distributed by banks totaled around 130 billion euros. The first repayments will start in April.
Countering the effects of the Covid-19 crisis
The State Guaranteed Loan was launched in March 2020 by the Ministry of the Economy, banks and Bpifrance to counter the effects of the crisis. Its aim is to provide liquidity quickly and at attractive rates, up to a quarter of annual sales and with 90% of the amount guaranteed by the State, the remaining 10% being borne by the lending bank.
Although the government had initially excluded the most vulnerable players from the scheme, it quickly revised its copy, giving all companies, whatever their size, the possibility of subscribing to an EMP.
638,000 state-guaranteed loans granted by banks
In all, banks granted 638,000 EMPs for a total of 130 billion euros. Among the beneficiaries, 89% are very small businesses (VSEs) with sales of less than 2 million euros. The small retail, hotel and catering and construction sectors are the most concerned.
To deal with the difficulties specific to certain activities, the government also launched the "PGE saison allowing companies whose revenues are strongly linked to tourism to borrow the equivalent of their best three months, as well as the "PGE Aéro for aeronautical professionals.
The risk of overindebtedness
When the EMP was created, the government introduced a one-year deadline before banks could demand repayment. This deadline is due to expire at the end of March for some companies, many of which have not been able to turn their businesses around. Bercy has nevertheless indicated that it will be possible for borrowers to negotiate a one-year postponement of the first repayments. CIC and BPCE are among the banks that have clearly communicated on the subject, and will be offering maximum flexibility to their customers "whatever their situation and needs".
Despite these measures, the risk of overindebtedness is still very real, particularly for SMEs. Some experts anticipate a 20% rise in bankruptcies this year. For its part, the Confédération des petites et moyennes entreprises (CPME) (Confederation of Small and Medium-Sized Enterprises) is concerned, denouncing the "reluctance" of banks to grant deferred repayments. It advocates the creation of a "consolidation loan", guaranteed by the State and amortized over 10 years, grouping together all company debts and receivables. This would give the hardest-hit players time to recover from the crisis.