Bruno Le Maire, Bpifrance and the Fédération Bancaire Française launched new State-guaranteed loans
In accordance with President Emmanuel Macron’s announcement of 16 March, all of the Fédération Bancaire Française’s (FBF - French Banking Federation) members, in collaboration with Bpifrance, launched an unprecedented system to allow the State to guarantee up to 300 billion euros of loans. These loans will help to ease the cash flow of businesses and professionals that are suffering from the Covid-19 consequences.
A massive and unprecedented system, set up in a week
This morning, the French Minister of Economy and Finance Bruno Le Maire unveiled the outlines of the “State-guaranteed loan”, designed to help all French companies overcome the significant disruption of their activity caused by the current health crisis. Through this mechanism, the State will be able to guarantee up to 300 billion euros in loans, or almost 15% of France’s gross domestic product.
This system is the result of an overall mobilisation to support the French economy, requested by President Macron. It is the first of its kind in Europe to have been validated by the European Commission within the framework adopted on March 19.
The launch of this system is made possible by the mobilisation in record time of all the energies of the banking networks, fully committed to the successful deployment of the State-guaranteed loans, as well as Bpifrance, which, in the space of 72 hours developed the platform necessary for the most fluid management possible of this massive system.
A clear and simple system open to all sectors of activity
Businesses of all sizes, regardless of their legal form (companies, shopkeepers, artisans, farmers, liberal professions, micro-entrepreneurs, associations, and foundations with an economic activity), with the exception of property investment companies, credit institutions and finance companies, have until 31 December to apply to their usual bank for a State-guaranteed loan to support their cash flow.
This loan may represent up to 3 months of their turnover for 2019, or, for innovative companies or companies created since 1 January 2019, two years of payroll. No loan payments will be required for the first year; the company may choose to amortise the loan over a maximum of five years.
The banks will study all requests submitted to them and give them a prompt response. They will distribute the State-guaranteed loans all at once, at cost price, so as to immediately ease cash flow for businesses and professionals.
French Minister of Economy and Finance Bruno Le Maire declared: “The launch of the State-guaranteed loan will allow all French companies to meet their cash-flow needs during the difficult circumstances of the coming months. By backing these loans with a 300-billion-euro guarantee, the State is implementing a massive and unprecedented instrument to protect French companies from the slowdown in activity.”
CEO of Bpifrance, Nicolas Dufourcq said: “Bpifrance is contributing to this airlift of cash to businesses by providing the infrastructure for the guarantee granted by the State for loans made by banks to the French economy and granting unsecured loans to the country’s very small companies, SMEs and mid-caps.”
FBF President Frédéric Oudéa said: “In the situation facing our country, our networks and our collaborators are totally committed to supporting the French economy. We are there for our customers in all territories.
We will have all of the State’s resources as well as our own resources to help us provide the right solutions to companies facing this extraordinary crisis. The banks are and will continue to be here!”