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French loans guaranteed by Bpifrance

Understand how the Bpifrance guarantee applies for eligible companies

Nicolas CHECK avatar
Written by Nicolas CHECK
Updated over a week ago
  • Eligible French projects can benefit from a Bpifrance guarantee.

  • The guarantee coverage ranges between 50% and 70% depending on the type of project.

  • The guarantee can be requested only if a project goes into insolvency proceedings.

What is Bpifrance?

Bpifrance is the French Public Investment Bank. Bpifrance supports micro-businesses, SMEs, mid and large-caps that are considered important to the interests of France. To do so, they offer solutions adapted to the needs of each company: business creation, financing, guarantees or equity investments.

In 2020, Bpifrance's existing guarantee system was reinforced to participate to the Covid-19 support program developed by the French State ("Plan de Relance"), which will last until the end of 2022. The guarantee scheme designed by Bpifrance focuses on 3 branches: business creation and transfer, business development and liquidity (ie. strengthening of the cash flows). While historically the guarantee offer could be as high as 40% to 50% of the outstanding, the new guarantee coverage has been increased to help companies recover from the crisis.

What is the agreement between October and Bpifrance?

Since autumn 2021, October can distribute loans covered by Bpifrance.

October offers loans up to €1,500,000 to eligible companies to finance business development, liquidity and business transfer projects.

  • Loan requests to finance a development or liquidity project below €200,000 will be analysed instantaneously using our automated scoring model, Magpie.

  • Projects superior to this amount or related to a business transfer will be analysed following our standard process.

The loans covered by Bpifrance will have a minimum duration of 24 months and will be amortised through monthly instalments: every month, you will receive a fixed repayment made of capital and interest.

What companies can be eligible to a loan backed up by Bpifrance?

To be eligible to a loan backed by Bpifrance, companies have to meet the following criteria:

  • SMEs based in mainland France;

  • With up to 250 employees;

  • With an annual revenue below 50 million euros or with a total of assets below 43 million euros;

  • With 1 year of existence (for Standard Projects) or 3 years of existence (for Instant Projects);

  • That have not been involved in any insolvency proceedings in the last 5 years;

  • Not active in the following sectors: finance, real estate, agriculture.

October reserves the right to request additional personal guarantees, as an exceptional measure, in case it is considered necessary.

How does the guarantee from Bpifrance work?

  1. The coverage

    The guarantee offered on each loan will depend on the type of project financed. If the project is related to:

    • Development: 60% of the outstanding will be guaranteed

    • Liquidity: 50% of the outstanding will be guaranteed

    • Business transfer: 70% of the outstanding guaranteed

    For borrowers, the guarantee reduces the risk profile of the loan, allowing to get better loan conditions.

    For lenders, the guarantee reduces the risk of capital loss. However, if a project goes into insolvency proceedings, you could still lose the part of your capital uncovered by the guarantee.

  2. Application:

    The guarantee is available for both private and institutional lenders, regardless of their country of origin. The amount recovered will be shared between all lenders according to the amount they have lent.

    Bpifrance's guarantee will apply:

    • If the company goes into insolvency proceedings. Therefore, if a project you financed has some missed payments but is yet not in a insolvency proceedings, the guarantee will not apply but October will implement the necessary recovery actions to defend the October lenders' interest.

    • If the loan was contracted at least 9 months before the guarantee was called.

    If one of these conditions is not met, the guarantee may not be enforceable.

  3. Cost:

    The guarantee is totally free for lenders, the cost of the guarantee is supported by the company.

What are the differences between loans guaranteed by Bpifrance and the French state-guaranteed loans to support companies affected by Covid-19 ?

  • The backer: the state-guaranteed loans for companies affected by Covid-19 (SGLs) are covered directly by the French State, as an exceptional measure to help companies face the pandemic. The Bpifrance guarantee is part of an existing program allocating public money to support French SMEs, and which was enhanced to participate to the global Covid-19 support program.

  • The type of projects covered: the Covid-19 guarantee was offered to companies that were directly affected by the pandemic between 2020 and the end of 2021.

  • The coverage: 90% of the outstanding capital and interest are covered in case of Covid-19 guarantee.

  • The amortisation: within the Covid-19 guarantee program, SGLs are initially 12-month deferred project, which can be extended up to 5 years.

  • The interest rate: Covid-19 guarantee presents a 2% interest rate during the first year and an increased interest rate in case of extension.

How can you spot these projects on October?

If a loan benefits from the Bpifrance guarantee, it will be specified on the project description, so you can make an informed decision. The project description will include the type of project financed and the percentage of coverage.

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