State-guaranteed loans: extension until December 31, 2022

The Minister of Economy and Finance had announced that state-guaranteed loans (PGE(1)) can be granted to companies until December 31, 2022. This six-month-extension as of June 30, 2022, officially recorded by the amended finance law for 2022, voted this summer, applies both to the old PGEs (those set up in the context of the Covid-19 health crisis) and to the new, so-called “resilience” PGEs (those established to support companies impacted by the war in Ukraine).

The opportunity to recall the main characteristics of these two loans.

The “old” PGE

Established to support companies impacted by the Covid-19 epidemic, the PGE is open to all companies, regardless of their size and sector of activity (except for certain real estate companies, credit institutions and finance companies), as well as associations. The amount of the loan is capped at 3 months of turnover, or 2 years of payroll for new or innovative companies. Its repayment is deferred for one year, or even 2 years if the company wishes, and can be smoothed over a period ranging from 1 to 5 years. The maximum duration of a PGE is therefore 6 years. Its rate is between 1% and 2.5% depending on the duration of the loan. As its name suggests, the State guarantees the loan up to 70% to 90% of its amount, depending on the case.
In practice, companies must contact their bank.

The new, so-called “resilience” PGE

Set up to support the cash flow of companies affected by the economic consequences of the conflict in Ukraine, the “resilience” PGE allows companies concerned to borrow up to 15% of their average annual turnover over the last 3 years, in addition to a PGE obtained in relation to the Covid-19 crise.

In practice, companies must also apply to their bank and certify to it, on a declarative basis, that their cash flow is affected, directly or indirectly, by the economic consequences of the war in Ukraine. No other conditions (legal form of the company, size, sector of activity, etc.) are required. Each application is considered on a case-by-case basis based on the company’s financial situation and financing needs.

The rules of repayment and depreciation of a “Resilience” PGE are the same as those applicable to the old PGE: maximum duration of 6 years, no repayment in the first year of the loan, same guaranteed quota.

(1) Prêts Garantis par l’État (PGE)