How firms can get state-guaranteed Covid loans in France

The prêt garanti par l’État (PGE) is a loan scheme that is available to all businesses affected by Covid-19, regardless of their size or legal structure. This includes freelancers, artisans, small businesses, farmers, etc.

The PGEs are available until December 31 2020.

The state guarantees 70% of the loan amount for bigger companies or up to 90% of the loan for smaller companies.

This loan can be worth the equivalent of three-months' of turnover (calculated from last year).

For new companies or start-ups, the amount of the loan can be worth up to the equivalent of two years' of payroll.

It is possible to apply for several loans at the same time, but the cumulative amount of these loans must not exceed 25% of your company’s turnover or two years' of payroll for a new company.

There are different steps to obtain the loan depending on the size of your company.

If your business employers fewer than 5,000 people and the turnover is less than €1.5 billion:

If your company employs more than 5,000 people and the turnover is over €1.5 billion:

Reimbursement

The cost of the loan is calculated on a case-by-case basis and ranges from 0.25% to 0.5% of the total loan amount. No loan repayment will be required in the first year.

The loan can be repaid over a maximum of five years.

Refusal rate

It is worth noting that the loan request can be refused by your bank if your company’s finances are too unsure.

However to date there is a very low rate of refusal rate of around 3% of requests.

Small and medium-sized businesses and very small businesses (Très Petites Entreprises or TPEs) make up around 94% of the loan schemes beneficiaries.

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