In June 2020, the government had set up aid schemes in the form of repayable advances and subsidized loans to meet the cash flow and investment needs of companies hardest hit by the health crisis. These measures have been extended until December 31, 2021.
Which companies are eligible?
Introduced more than a year ago in France, these repayable advances and subsidized loans are reserved for small and medium-sized enterprises (SMEs) and mid-sized businesses (SMBs) that can demonstrate real prospects of turning their operations around, and which have been refused a government-backed loan (PGE) or have obtained an insufficient PGE to continue their business.
Another condition is that the company must not be the subject of collective insolvency proceedings.
Form and amount of aid
Beneficiary companies can claim a repayable advance if the amount of aid is less than 800,000 euros, or a soft loan if the amount is more than 800,000 euros.
When the aid takes the form of a repayable advance, the repayment period is a maximum of 10 years, and the capital repayment grace period is limited to 3 years.
When the assistance takes the form of a soft loan, the maximum repayment period is 6 years, with a one-year capital grace period. The fixed interest rate depends on the maturity of the loan (2.25% for 6 years).
The amount of aid is a maximum of 25% of sales in 2019 or the last financial year for companies created before January 1, 2019, or the estimated payroll for the first two years of business for companies created on or after January 1, 2019.
Schemes extended to December 31, 2021
Set to expire at the end of 2020, these measures were first extended until June 30, 2021. Decree 2021-839 of June 29, 2021 finally postponed their expiry date to December 31, to support the cash flow of companies impacted by the crisis and unable to find financing solutions with their bank or other lender.
Companies wishing to benefit from a repayable advance or a subsidized loan must submit their applications to CODEFI (departmental committees for the examination of business financing problems). Certain companies that have lost at least 50% of their sales in 2020 will be required to submit a document from a chartered accountant certifying that they meet the various criteria.
The Committee's opinion takes into account the company's economic and industrial positioning, and more specifically its strategic nature, its recognized know-how and its importance within the employment area in which it operates. This decision is laid down in a decree issued by the Minister of the Economy and Finance.