State guaranteed loans: the government wants to increase the repayment period “from six to eight years”

With the closure of large shopping centers, the rebellion of restaurateurs and the fear of mountain professionals, Alain Griset, the minister in charge of VSEs-SMEs, has his work cut out for him. It gives us exclusive details of the measures taken to strengthen aid to businesses: reassessed solidarity fund for certain sectors, possible extension of the repayment period of loans guaranteed by the State, participatory loans to support around 20,000 SMEs / midcaps, etc.

In 2020, business failures were reduced, thanks to state aid. What are the forecasts for 2021?

ALAIN GRISET. We cannot do any costing at this time. But in 2020, it is true, we count around 35,000 failures, which is 35% less than a normal year which has around 50,000. As long as the State continues to support companies, the phenomenon should not continue. ‘accelerate.

Are VSEs and SMEs particularly at risk?

They are agile and resilient and are no more at risk than large companies. But some are in essence, from their creation, more fragile.

Despite everything, they are particularly threatened by a high debt ratio, particularly linked to the loan guaranteed by the State (PGE) …

The EMP was an extremely useful tool, almost 700,000 companies benefited from it, for more than 130 billion euros. Thanks to him, they have passed the difficult moment of 2020. In addition, they will be able to repay these EMPs with an additional year of deferral. In this case, at the earliest, these repayments will take place in March-April 2022 and will then be made over four years instead of six years. Nevertheless, business leaders are worried, they wonder if this solution is enough. I believe there is a real subject there.

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Do you have a solution ?

We are starting to discuss with the European Commission on extending the reimbursement period for EMPs. We would like to go from six years to eight years. The important thing is to secure entrepreneurs and give them visibility. They must not have a sword of Damocles above their heads which would hamper the recovery. We hope for a return from the Commission in 2021.

Are there any new aid plans for businesses that will have to remain closed for at least several weeks?

Yes. We will continue to adapt the solidarity fund to respond to the diversity of situations. Today, the companies most affected by the crisis can benefit from compensation up to 20% of their turnover for the previous year, capped at 200,000 euros per month. But for a number of players, this is not enough.

Which ?

Those with structural fixed charges greater than 20% such as indoor halls – which host bowling alleys, laser games, climbing halls, etc. – but also sports halls. The extension of the 70% fixed cost support system, announced a few weeks ago for companies with a turnover of more than 1 million euros, could benefit them. They will therefore have their fixed costs, up to 70%, covered for the period from January to June 2021 within the limit of three million euros per group.

Is there any other aid planned for larger companies?

Yes. As we announced with Bruno Le Maire (Editor’s note: the Minister of the Economy), participatory loans will be set up as part of the recovery plan, which will generate up to 20 billion euros for SMEs and mid-cap companies with transformation investment projects. We are targeting about 20,000 businesses. It is the banks which will distribute these loans, with a longer maturity and the State will be able to provide support in the form of a guarantee, up to 35%, as voted by Parliament. Their release is scheduled for the first quarter of 2021.

Companies with a turnover of over 1 million euros benefit from aid capped at 3 million euros. Do you confirm that it could be revalued to ten million euros?

Brussels has announced that aid from member states could be reassessed up to ten million euros. Discussions are underway on the ceilings for French companies. Three million euros, that might not be enough for companies of a certain size weakened by long months of crisis.

When will business aid be scaled down?

The President of the Republic was very clear: they will be maintained as long as the crisis lasts. The state will remain alongside businesses. Already today, 90% of the economy is functioning normally. For the others, we will continue our support. But as certain sectors recover, aid will be adjusted according to the economic situation.

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