Participatory loans: a device deemed necessary but insufficient by economists

He was eagerly awaited. The Bercy system to strengthen the equity capital of companies weakened by the crisis undeniably responds to a pressing need. “The crisis has all the same cut the equity of companies by around 60 billion euros last year”, recalls Michel Didier, the president of Rexecode. In a context of weakening of the productive fabric, insufficiently capitalized, government measures, whether it is participatory loans and subordinated bonds, constitute “Good decisions that will facilitate the rebound in activity”, considers the economist.

These equity loans are a useful instrument and will constitute a financing facility for companies. “, Also considers Philippe Martin, deputy director of the Economic Analysis Council (CAE). This is a tool aimed at SMEs and mid-size companies (ETI) whose situation is in a middle ground. Neither very bad, otherwise the banks would not lend to them, nor very good, since otherwise they would not need it. For very small businesses and SMEs in great difficulty, other instruments will have to be offered ”, explains the economist. In short, “Equity loans are necessary but not sufficient”, summarizes Philippe Martin. An observation shared by several economists.

Businesses will go under the radar

First, because the amount of 20 billion euros is lower than the real needs. “Income losses in 2020 represent around 160 billion euros, two-thirds of which have been absorbed by the state. But with nearly 65 billion in losses, companies bear a third of the total loss, while on average, households have not seen their purchasing power decline last year “, underlines Mathieu Plane, economist at the French Observatory of Economic Conjunctures (OFCE). “France is one of the countries in Europe with the highest cost for businesses”.

Then, “A quarter of the sectors of the French economy alone suffered nearly three quarters of the total operating losses of companies”, he says. Sectors such as hotels and restaurants, culture, commerce, construction, transport and transport equipment were badly affected. However, these are very often “Small businesses that risk going under the radar”, according to the economist. A restaurant which employs 7 employees will not ask its bank for a participatory loan. Especially since the loan rate, between 4% and 5.5% is too high for hypercompetitive sectors which generate a low margin.

Bercy will therefore have to complete the system to allow very small businesses to survive. “We must also see further and bigger”, insists Michel Didier, who considers the need to modernize gigantic productive capital to face climate change and digital challenges. To strengthen equity by around 100 billion euros, “This will necessarily go through the mobilization of the savings of the French in a sustainable way and therefore by the invention of new tools”. This will be the next step. But the finish is still a long way off.

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