The government of France will be guaranteeing around 3 billion Euros ($3.6 billion) to small and medium enterprises in quasi-equity long-term loans to help the business entities boost their financial outlooks since a majority of them have been affected by the pandemic significantly.
France’s Finance Minister Bruno Le Maire made the revelation in a newspaper interview further saying debt pile by French companies is at a record high. Since the pandemic set foot in the beginning of the year many companies in the European nation ran out of options rather than to borrow funds to see them stay afloat.
Up to date, the government of France has already offered to guarantee up to 300 billion euros which shall be dished out as bank loans. However, weak balance sheets of small and mid-size business entities has led to multiple of them filing for bankruptcy. This prompted the country’s central bank to move with pace and salvage the situation.
“These long-term loans are indispensable for SMEs whose debt loans are too high, holding back their development and investments,” said the Finance Minister.
Le Maire says these loans will be offered to SME’s which have been in existence for over 7 years. The government is hoping the SME’s will capitalize on the loans and be able to generate 10-15 billion euros.
The Minister added talks on how much the banks will be charging for the loans are still ongoing and also how the banks will choose the viable businesses for the loans.