Updated on 1 April 2020

In order to take into account the impact of the coronavirus epidemic on economic activity, and in accordance with the announcements made by the President of the Republic on 12 and 16 March 2020, the tax authorities have put in place exceptional support measures for businesses. Similar measures are also being taken in the social sphere.

In addition, the BPI also announced the introduction of exceptional support measures for companies affected by the consequences of the coronavirus.

What are the measures put in place by the BPI?

Bpifrance, for its part, has instituted a number of exceptional measures in favour of businesses to enable them to cope with the difficulties caused by the coronavirus - COVID-19 epidemic.

These measures consist of the setting up of a guarantee scheme for existing bank credits (I) and the granting of new credit lines (II).

(I) Establishment of a bank credit guarantee fund: this fund will be intended to:

  • Strengthen the financial structure of companies through guarantees, up to 90% (with a maximum risk ceiling of EUR5 million for SMEs and EUR30 million for ETIs and a commission ranging from 1.25% to 2.5%), loans, leases (movable and immovable property) and financial leases granted on a medium and long-term basis (duration of three to seven years or 15 years in certain circumstances).
  • Reinforce the establishment and renewal of existing credit lines by guaranteeing short-term loans (overdrafts, overdraft facilities, mobilisation of receivables, discounts, Dailly) confirmed by the banks over 12 to 18 months up to a maximum of 90% (with a maximum risk ceiling of EUR5 million for SMEs and EUR30 million for ETIs and a commission of between 1.25% and 2.5%).

It should be added that BPI clients will benefit, as of 16 March 2020, from an automatic deferral of all maturities relating to their loan (capital + interest) for a period of six months and without any administrative fees.

In addition, the factoring guarantee system for factoring companies currently benefiting from agreements with SMEs is evolving so as to (i) increase the maximum outstanding amount of guaranteed receivables from EUR200,000 to EUR500,000 and (ii) allow the release of the guarantee deposit, which is currently excluded from the guaranteed envelope.

Finally, a maturity extension may be granted for bank financing guaranteed by Bpifrance.

In order to benefit from all these guarantees, the company will have to contact its bank directly, which will contact the Bpifrance regional office.

(II) Implementation of a new financing mechanism:

  • The introduction of a "trump card" loan to enable businesses to finance their cash flow needs in this very special economic climate. In short, it is a credit without security on the assets of the company or its manager. The amount of the loan ranges from EUR50,000 to EUR5m for SMEs and up to EUR30m for ETIs. This loan is granted over a period of three to five years, including six to 12 months of deferred capital repayment. It must also be combined with a bank loan for the same amount (one-for-one financial partnership).
  • Other loans are also offered in partnership with the regions, such as the "Rebound Loan" with the Grand-Est Region (for SMEs that have been in existence for three years and carry out most of their activities in the Grand-Est Region - this loan ranges from EUR30,000 to EUR300,000) or the "Back'up Prevention Loan" with the Île-de-France Region (for SMEs and SMIs operating in Île-de-France).

Which companies benefit from these schemes?

  • For guarantee schemes (loans and lines of credit): this concerns VSEs, SMEs and large independent intermediary companies (IICs), regardless of their date of creation.
  • For the financing scheme (Loan with Advantage): this concerns VSEs, SMEs and Independent Intermediary Companies (IICs) with at least 12 months of activity.

It should be noted that all these measures are exceptionally open to SMEs or ETIs, more than 25% of which are owned by venture capital companies.

For the time being, and in accordance with European regulations, companies that are subject to difficulties (including those subject to collective proceedings) are excluded from the scheme.

However, this measure does not seem to concern companies subject to a continuation plan or a preventive procedure provided that they comply with European standards.

Have additional measures been initiated by private operators?

In the same vein, the French banking federation, in a press release dated 15 March 2020, stated that it was implementing a number of measures in conjunction with the aforementioned public measures. These measures consist essentially of:

  • The implementation of accelerated credit appraisal procedures for tight cash flow situations (five-day time limit);
  • The deferral (up to six months) of loan repayments for businesses;
  • The elimination of penalties and additional costs for extensions of deadlines and credits for companies.

Should we expect additional measures?

As part of an enabling bill submitted to the Senate on 18 March 2020, the Government is proposing a review of the organisation of the Bpifrance group with a view to increasing its efficiency and notably to free up additional capacity for Bpifrance Financement in its business support activity in this period of crisis. In particular, there is talk of merging the public limited company Bpifrance and its subsidiary Bpifrance Financement.

A complementary finance bill for 2020 also targets the Bpi guarantee mechanisms.

In doing so, other corporate treasury support schemes are to be introduced.