Government-guaranteed loans: “I don’t know if I can pay”, the hour of reckoning has come

Businesses must start repaying government-guaranteed loans (PGE) taken out during the health crisis. When most have started to repay, it is not so easy for others …

No longer able to delay, companies must now start repaying government-guaranteed loans (PGE) taken out during the health crisis, and if most manage to meet their deadlines, for some the situation is critical and forced to call their leniency banks.

How can I refund a PGE equal to 15% of my sales when I’m still making 20% ​​less sales than before the crisis? It is not possible. Patrick Bellity, head of foundry at Sifa Technologies, summarizes the dilemma he currently faces.

“I don’t know if I could pay”

The company, already weakened by the diesel crisis at the end of the 2010s, signed a PGE in mid-2020. The entrepreneur has negotiated a postponement of its first refunds until November 2022. And then ? “ I don’t know if I can pay because I don’t know how high my order level will be in the fall ‘ he lets go.

According to the Banque de France on the almost 700,000 companies are subscribed to a PGE with a total of more than 148 billion euros, the default rate could hardly reach 3%.

With a few exceptions, the companies have started reimbursement as planned ‘ we say in Bercy, where the crisis exit committee created in mid-2021 is being piloted.

“No more room for maneuver”

But these rather reassuring stats shouldn’t hide the real struggles some companies are having.

As for the tourist group Pierre et Vacances, which was forced into an emergency plan and whose PGE was converted into capital for more than 200 million euros, bringing creditors into the group’s participation.

In the hospitality industry, where many companies have taken out PGEs, one in four companies said they were unable to meet their refunds at the end of June as inflation dampened consumer spending.

The situation is also tense in tourism, where “ Many companies hit hard by the pandemic have applied for the maximum allowable PGE, i.e. (an amount equivalent to) 25% of sales. Paying back over four years is really complicated ‘, worried Yvon Peltanche, representative of the Entreprises du Voyage trade association.

He himself has completed several PGEs for his network of travel agencies. He has no difficulty paying at short notice, but has” no more room for maneuver if activity falters, as he already fears given anticipated disruptions to air traffic this summer.

credit brokerage

Difficult companies can request restructuring of their PGE through credit intermediation, through a special mechanism negotiated between the State and the banks, which notably allows the repayment period to be extended up to 10 years.

At the moment only 300 cases have been processed by the credit agency, a number ” very low “, a sign that the financial situation of the companies remains positive, according to the mediator Frédéric Visnovsky.

However, many companies are unaware of the existence of this 10-year tiering mechanism, and many others avoid it because it downgrades their rating and makes their funding more difficult.

If you default, credit insurers pull out, meaning you have to pay your suppliers right away, and that only makes the situation worse. ‘ also advances François Asselin, President of the CPME, who believes that companies will tend to ‘ prefer collective procedures that freeze debt » (Security plan, receivership, liquidation, etc.)

We are aware of this difficulty, but the PGE is a bank loan, so banks apply rules », Fixed at European level, we answer Bercy.

The Banque de France, on which credit intermediation relies, may soon revise upwards its forecasts of the number of companies unable to repay their PGEs, Frédéric Visnovsky concedes.

Kaddouri Ismail

I am Ismail from Morocco, I work as a blogger and online marketer. I am also the founder of the “Mofid” site, in which I constantly publish many important articles in the field of technology, taking advantage of more than 5 years of experience working in the field. I focus on publishing in a group of areas, the most important of which are programming, e-marketing, digital currencies and freelance work.

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