As early as March 2020, banks had introduced credit moratoria to enable companies to cope with the containment. 2 million companies took advantage of these measures, deferring over 20 billion euros in repayments. Faced with an ongoing health crisis, the banks have decided to reactivate these measures.
Extended credit terms for companies in difficulty
The measure was announced in the wake of government announcements concerning the extension of the nationwide 6 p.m. curfew, and was the subject of an agreement between Bercy and the French Banking Federation (FBF), chaired by Philippe Brassac. Moratoria may once again be granted to companies facing closures or restrictions on activity, although the final decision will rest with the bankers.
"That's our job, and it's the most obvious thing to do: we obviously have to grant all the necessary moratoria to companies or professionals who are still affected externally by these restrictions on activity," declared Philippe Brassac on Friday January 15 at the Radio Classique microphone.
"It is the strength of the French relationship model to be able to work closely with each and every one of our customers to find every possible solution. This battle to safeguard our economy will be won," he stressed in an FBF press release.
Deferred repayments on state-guaranteed loans
State-guaranteed loans have been a resounding success, with 630,000 companies benefiting from them to the tune of 130 billion euros. Initially, repayment of these PGEs was to begin no later than one year after they were taken out.
However, in view of the extremely complex health situation, which is still leading to business restrictions, a deferral of a further year may be granted. Companies wishing to do so will therefore be able to repay only the interest and guarantee initially, and postpone the first monthly instalments until 2022.
"Continuing their commitment to support the economy, banks are today undertaking to systematically accept any request for a further year's deferment of the repayment of the EMP capital, made by a company or professional who feels the need, whatever their sector," said the FBF. The total duration of the loan remains limited to 6 years.
"At the other end of the scale, we estimate that between 5% and 10% of companies think it will be difficult for them to pay back their EMPs in the end," says Philippe Brassac.