The government extends the participatory loan system until 2023

Posted on Nov 10, 2021, 7:17 PMUpdated Nov 10, 2021, 7:42 PM

Faced with the strength of the economic recovery, the government is adjusting its financial toolbox. After the announcement at the start of the week of the six-month extension of the state guaranteed loans (PGE) system, until the end of June 2022, the calendar of stimulus participatory loans (PPR) will also change.

Bercy has in fact decided to extend by eighteen months this system launched last May and which was initially due to end on June 30, 2022. The PPRs will finally be accessible until the end of 2023.

“By extending the dates for signing and granting participatory loans, we want to be able to offer more visibility to companies, which need time to project themselves into the future and target their investment needs,” he explains. on the side of the Ministry of Economy and Finance. The extension will also apply to future stimulus bonds, which are due to be officially launched next week.

An amendment to the 2022 finance bill was tabled Tuesday evening to formalize this new schedule; it is in addition to that filed for EMPs. The government must nevertheless obtain the approval of the European Commission for these changes to be effective. Brussels is expected to vote on November 17.

Less important than expected

Since their launch last spring, the PPRs, which are distributed by banking networks and guaranteed up to 30% by the State, have struggled to find their audience. The official figures are not known, but on the side of the banks as of the government, one recognizes that the companies do not jostle at the counter.

“The recovery is proving to be much stronger than expected, with a growth forecast of + 6.25% for the year. The capital requirements are ultimately less important than expected, and that’s good, ”explains a source in Bercy.

However, there is no question of abandoning the device, for which insurers have so far mobilized eleven billion euros. “Despite the recovery, there are companies that need to strengthen their balance sheets to prepare for the future, and this tool remains very useful. But it may take longer to appropriate it, ”adds this same source.

If the timeline changes, the very nature of PPRs remains the same. However, for many companies, these products are complex and difficult to understand. With a duration of eight years, with interest rates between 4% and 5%, these loans were initially presented as a quasi-equity instrument, which would also serve to strengthen the financial structure of the business. From an accounting point of view, they are nonetheless a debt, which can chill candidates.

Educational efforts

To facilitate understanding, Bercy and the banks have redoubled their efforts in terms of teaching. Frequently asked questions were notably published this summer. Distribution has been made easier with a simplification of contracts.

In order to attract more candidates, the device will also be open to companies that are owned by funds. And some mid-sized companies will be able to benefit from a grace period of six years, instead of four.

One thing is certain: the bill for the State should prove to be much lower than expected, given the poor success of the PPRs. While the government had originally budgeted 2 billion euros in provisions for the device, this amount has already been revised downwards to around 1.2 billion euros.

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