France has seen a massive roll-out of government-backed loans (GBLs) since end-March 2020: at 9 April, nearly €137bn had been disbursed to more than 675,000 businesses.
The programme was set up in record time
and has proved highly adaptable to the conditions of the health crisis
and to economic requirements. It has since evolved to aid professional
and corporate customers dealing with cash flow problems due to the
constraints of the health crisis: Seasonal GBLs are available in
particular for cafés, hotels, restaurants, and tourism, sports and
cultural organisations; principal repayments can be deferred for an
additional year; GBLs extended until 30 June 2021.
French
banks have been in talks with the government authorities to take into
consideration the health crisis and the resulting restrictions for
certain sectors: subject to the adoption of the laws and regulations
already announced by the government, French banks will be able to
process GBL applications until 31 December 2021. They have also
confirmed that GBLs can be taken out to cover operating liabilities.
Recent
indicators on GBL repayment intentions underscore that the loan has
successfully adapted to the variety of post-health crisis scenarios. A
very large number of businesses have held on to the cash stemming from
their loans, including GBLs, serving as a buffer to launch a full-scale
recovery. At 16 April 2021, out of more than 459,000 GBLs for which
customers have indicated their selection (contract or clear intention):
- 53% have elected to delay principal repayment for one year;
- Around 14% will begin repaying the loan starting in 2021;
- 6% will begin repayment between 2022 and 2023;
- 11% will begin repayment between 2024 and 2025;
- 68% have opted for the longest possible loan term (2026 maturity).
French
banks have stood by their customers throughout the health crisis,
rolling out massive solutions and individual support. They are ready,
willing and able to find the right solutions for each of their
customers.
FBF
© FBF - French Banking Federation
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