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The word eco. Corporate debt peaks


A colossal private debt. Debts that will have to be repaid over 6 years, or even over 8 years. (GETTY IMAGES / MOMENT RF)

Much is said about the fact that public debt keeps rising, but private debt, too, is peaking. According to the latest figures, published this week by the Banque de France, corporate debt now stands at nearly 1900 billion euros.

Companies usually get into debt, to invest, they go to their banks, obtain loans to support their development, buy machines, except that there, debt is a concern for several reasons. First by its very sustained pace. Last year, companies paralyzed by the health crisis went en masse to their bank to ask for a EMP, a loan guaranteed by the state. Almost 140 billion in loans granted in total to some 650,000 companies. Companies that have also sometimes asked to benefit from contribution deferrals.

The concern is mounting because many realize that the activity is likely to start again slowly, more slowly in any case than hoped. So companies want to save time, keep this safety mattress, this cash. The government has already obtained a one-year postponement of the start of reimbursement of EMPs. If they wish, all companies that have taken out one can therefore go to their bank these days to ask to start repaying them only in 2022.

Today, these loans must be repaid over 6 years. Should this period be extended? At 8 years old, according to the wishes of the Minister for Small and Medium-Sized Enterprises, at 10 years old, asks the CPME. Attention, we warn in Bercy, this extension must already be validated by the Commission. It can also mean higher interest rates.

Obviously, this risk exists. This is also why it was endorsed by the State, which undertakes to reimburse the bank if the company cannot do so. And the question arises. Have we artificially kept businesses that were not viable? This question is all the more legitimate when we see that the number of bankruptcies fell by 30% last year compared to the previous year. All in all, this risk is low, according to the Banque de France. Only between 4 and 6% of all BMPs contracted in total. If this estimate holds, we can say that the “whatever the cost” has contributed to maintaining the French economic fabric as it is.

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