Faced with repayment difficulties, the EMPs could be rescheduled until 2026

2024-01-07 16:43:00

Getting money to deal with the crisis is good. Being able to pay it back is better. Faced with the persistent difficulties of certain companies in repaying the state-guaranteed loans (PGE) from which they benefited during the pandemic, the state and institutional actors concerned have decided to extend the possibility of rescheduling until December 31, 2026.

This Sunday, the Ministry of the Economy and Finance, the Bank of France, the Overseas Departments Issuance Institute (IEDOM), the Overseas Issuance Institute (IEOM) and the French Banking Federation announced a market agreement to extend the market agreement of January 19, 2022 on the restructuring of EMPs. For three years, companies will be able to continue to call on Business Credit Mediation to benefit from this support system. It was supposed to end on December 31, 2023.

“This will save some businesses. I have always said that the loan guaranteed by the State was there to support businesses, not to be a burden”declared Bruno Le Maire, Minister of the Economy this Sunday on France 3. “So if some companies still have difficulty repaying, they can continue to reschedule”he continued.

Reimbursement of PGE: when the remedy becomes poison for VSE-SMEs

50 billion already reimbursed, but difficulties

Bercy indicated in a press release that “the vast majority of companies faced the reimbursement of their PGE in 2022 and 2023 without difficulty”. The ministry thus estimates that “more than 50 billion credits have been fully repaid out of the 107 billion euros granted to VSEs/SMEs since 2020”.

It recognizes “however, (that) certain companies may individually encounter difficulties in repaying their bank loans, including their PGE”, hence the need “to support VSE-SMEs encountering difficulties in repaying their bank debts in seeking amicable solutions with their bank.

PGEs have made it possible to keep the cash flow of companies damaged by the pandemic afloat. But these same companies, weakened by this crisis and then by inflation, have seen their debt sometimes increase significantly. And some of them are now struggling to repay these loans, granted by banks with interest of between 1 and 2.5% (cost of the State guarantee included).

Only 4% of state-guaranteed loans (PGE) encounter repayment difficulties

Nearly a third of VSE-SMEs affected

According to a study published in mid-December by the Confederation of SMEs (CPME) following consultation with VSE-SME bosses, 28% of companies having subscribed to an EMP at the time of Covid are encountering increased difficulties in repaying their loan and 3% are no longer able to to repay it, being in fact forced to cease the activity.

In fact, as Bercy indicates, the restructuring system has already accompanied “around 560 companies in 2022 and 2023 by allowing them to spread the EMP over a period of two to four additional years compared to the initial schedule”.