According to figures provided by the Banque de France to the daily newspaper Les Echos, only 3,944 of the more than 650,000 companies benefiting from state-guaranteed loans have been the subject of legal proceedings for non-recovery of debts. The default rate is 0.6%.
3,944 beneficiary companies under legal proceedings
Since the crisis mechanism was set up in 2020, at the start of the first containment period, 650,836 companies have benefited from a state-guaranteed loan. This option will continue to be available to companies in difficulty until December 31, 2021.
Of the 650,836 companies to which state-guaranteed loans were granted, only 3,944 went into receivership due to insolvency, representing a rate of 0.6%.
These figures, communicated by the Banque de France to the newspaper Les Echos, are therefore rather reassuring, and lower than the forecasts made by Bpifrance at the very start of 2021. At the time, Bpifrance CEO Nicolas Dufourcq had estimated the default rate for EMPs at between 4% and 7%, following a study carried out by Bpifrance and the Banque de France.
For banks affected by these defaults, it is then necessary to activate the state guarantee, which takes over from the company.
Vigilance remains the order of the day
The Banque de France is all the more optimistic in view of the fact that the number of business failures fell by 25.1% in September 2021, compared with September 2020. 27,359 companies went bankrupt in September, a figure that reinforces the institution's conviction that a long-feared wave of bankruptcies is finally no longer to be feared.
However, for the Banque de France, the time has not yet come to lower our guard. The 2020 annual balance sheets of 244,146 companies have been analyzed by the company rating service, which assesses the ability of these companies to meet their credit and other financial commitments, and assigns each a credit rating.
The companies whose balance sheets were studied all have annual sales in excess of 750,000 euros. In total, the cumulative sales of all these companies, which employ over 10 million people, amount to 3,347 billion euros.
This study by the company ratings service reveals that the net income of these companies is down for 52% of them, whereas the usual proportion, based on an average of the years 2004 to 2019, is 48%.
Of these, 14%, including 3% with government-backed loans, are considered "sensitive".