To allow French companies to face the economic crisis due to the current sanitary crisis and in order to maintain the economic activity and job sustainability, the Ministre de l’Economie et des Finances announced, on Thursday 19 March 2020, a reinforcement of the support mechanism for the financing of businesses[1].

Since then, the government put to the Assemblée Nationale, on 18th March, an amended finance bill for 2020 (the “Bill”) to implement this mechanism. The Bill was amended by the Assemblée Nationale, presented to the Sénat and finally adopted on 20 March 2020 (published on 24 March 2020).

The aim is to reinforce the cash position of companies and is based on three main measures.

1/ Exceptional State guarantee of €300 billion for loans to businesses

The Bill, among other things, provides for up to €300 billion euros (in principal, interest and ancillary costs), for all new loans granted by credit establishments and financing entities between 16 March and 31 December 2020 to non-financial companies registered in France.

The guarantees will be issued and managed by Bpifrance Financement SA on behalf of the French government, but also under its control, under certain conditions.

On 24 March 2020, an Arrêté was published which sets out the details of the loans and the features of the guarantee.

With respect to the loan:

  • it must provide for a minimum grace period of twelve months and an option for the borrower, at the end of the first year, to amortize it over an additional period of up to 5 years;
  • it must be unsecured (no other guarantee, no security interest);
  • eligibility to the guarantee is subject to the aggregate loans granted to the borrower not having fallen below their level as of 16 March 2020 (taking into account scheduled reimbursements prior to the date and possible voluntary reimbursements made by the borrower).

With respect to the eligible companies:

  • it is not available to businesses subject to insolvency proceedings, to other credit establishments or financing entities or to real-estate civil companies (société civile immobilière);
  • depending on the date of creation of the borrower (prior to or after 1st January 2019), there is a limit to the amount of the loans which may be granted. Innovative businesses (complying with certain criteria) benefit from a maximum, if more favourable, set at twice the amount of employment costs borne in 2019;

With respect to the guarantee:

  • it is granted automatically, provided it is notified to Bpifrance Financement SA. However, for loans granted to companies with more than 4,999 employees or with a turnover exceeding €1.5 billion euros (both criteria as at 16 March 2020), the decision will be taken on a case-by-case basis, by order of the Minister of Economy;
  • it can cover several loans to a same borrower and the guarantee will enter into force in a chronological order;
  • the guarantee fee varies with the length of the loan and the size of the business :
    • for businesses employing more than 250 persons or with a turnover of more than €50 million or a balance-sheet greater than €43 million:
      • 0,50% for the first year;
      • 1% for the two following years; and
      • 2% for the next three following years
    • for other businesses:
      • 0,25% for the first year;
      • 0,50% for the two following years; and
      • 1% for the next three following years.
    • a period of two-months after the granting of the credit will have to lapse before a call under the guarantee; and
    • it will only cover part of the loan:
      • 90% for businesses which employ less than 5000 persons and have a turnover of less than €1.5 billion;
      • 80% for businesses with a turnover greater than €1.5 billion but less than €5 billion;
      • 70% for the others.

The amount payable under the guarantee will take into account the sums recovered by the lender following enforcement, whether amicably and potentially judicially, including as the case may be under collective proceedings. In case of restructuration of the debt, the amount paid will take into account the value of the debt still held by the lender at the end of the process.

A committee is being set up to monitor and evaluate this guarantee and the action of the solidarity fund being set up by the (other) emergency law (n° 2020-290 of 23 March 2020) to deal with the covid-19 epidemic.

2/ Public reinsurance of insurance cover in an amount of €10 billion

As inter-company credit is an important source of financing for businesses in France, the government wishes to support credit insurance. It allows businesses to protect themselves from a possible default of their clients.

In order to address the possible concerns of credit insurers and to ensure the sustainability of financing through inter-company credit, the Bill proposes the implementation by the Caisse centrale de réassurance of a reinsurance mechanism for credit insurance risks relating to Small Size Entities and (SME) and Medium-Size Entities (ETI)[2], up to an amount of €10 billion. The mechanism will be for a limited period of time as it will apply only until 31 December 2020.

3/Reinforcement of the public reinsurance mechanism for short-term outstanding export credit insurance

To enable French exporting companies to continue to use credit insurance to secure their international operations, the public reinsurance mechanism « Cap Francexport« , initiated in October 2018, will be extended.

As a reminder, the aim of this mechanism is, in accordance with Article L.432-2, e) of the French Insurance Code, to allow the reinsurance by Bpifrance Assurance Export SAS (acting in the name, on behalf and under the control of the State) of insurance operations for political and commercial risks on exports to certain foreign countries. The term of payment must be less than two years and the overall limit is €1 billion.

The Bill brings, on the one hand, the maximum on the amount of outstanding loans reinsured by the State to €2 billion, and on the other hand, expands the list of countries of destination eligible to the scheme. Exports to European Union countries and high-income OECD countries are now also eligible.


[1] Press release from the Ministère de l’Economie et des Finances of 19th of March 2020, N° 2082 (

[2] The Bill sets out that the Caisse centrale de réassurance will be able to carry out insurance or reinsurance operations for commitments made in favour of sub-contractors with regard to the construction of individual houses, in accordance with Article L. 231-13, g) of the French Building and Housing Code.