Bpifrance provides guarantees that open up financing for riskier projects.
As the main provider of loan guarantees, Bpifrance makes it easier for SMEs to receive loans in the riskier phases of their financing cycle by sharing the risk of these transactions with the banks. By providing such guarantees where the market fails to do so, Bpifrance enables its partners to meet the expectations of those who carry out these specific projects.
These guarantees mainly apply to loans granted by banks but also, and increasingly, to the financing provided by Bpifrance as a direct lender in response to structural market deficiencies.
Bpifrance also provides a capital guarantee for equity investors.
The guarantee offered by Bpifrance is backed by dedicated public funds mobilised by the French government, the Caisse des Dépôts, the Regions, the EU, or other partners. It is these public entities who, as financiers, define the financing priorities, particularly on the basis of Bpifrance’s feedback.
Who is it for?
• Bank loan guarantee
If the guarantee is made available for the different financing purposes, the intervention priorities extend to 3 segments:
• Business creation or acquisition
Banks exercise caution when financing a business creation or transfer. They may feel it is too soon to make an assessment on the business being created, or there may be uncertainties linked to a change in shareholding combined with a leveraged buy out. All this may result in limited credit availability. A business being created or transferred entails a higher risk compared to that of more established undertakings. When Bpifrance intervenes to provide a guarantee, it also contributes to give newly created companies access to banking services and improves their sustainability. In fact, the amount of bank financing obtained through the guarantee provides financial security, increased borrowing capacity and greater growth prospects.
• Business growth loans
Business growth projects that involve intangible assets, innovative development or international development or that require working capital financing are generally non accompanied by collateral. The guarantee thus makes it possible to increase Bpifrance’s growth loan activity mentioned above, and for commercial banks to come up with comparable offers in response to these projects
• Liquidity support facilities
Offering precautionary liquidity support to companies makes it possible, thanks to the guarantee, to provide backing for the financial structure or to convert the short-term debt into medium-term credit. It also contributes to sustaining the activity of these companies in a more difficult economic context.
• Capital guarantee
Bpifrance also provides a range of capital guarantees for investments which aims to promote riskier regional private equity investments in SMEs, which include venture capital and small-cap growth equity investments.