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Understanding the SGL scheme in seven key points




Is a State-guaranteed loan (SGL) a State loan?

No, it is a cash loan offered by banks. The State covers, through its guarantee, a large portion of the related risk (between 70% and 90%), together with banks. This guarantee on the loan will be activated only if necessary.


What is a State-guaranteed loan (SGL), and what is its rate?

The State-guaranteed loan is a bank loan, offered by banks, to support the cash flow of professionals and businesses affected by COVID-19.

It can account for up to 25% of the businesses’ total revenues excluding tax recorded in 2019, or the last fiscal year ended. Certain sectors such as Tourism and Aerospace are eligible for higher amounts.

It is granted for a period of 12 months. No repayment will be required during the first year (excluding borrower insurance where necessary). The principal and the guarantee commission will be payable by the borrower at the end of the 12-month period.

At the end of the 12-month period, the cost of the guarantee will be charged; if the borrow is unable to repay the loan, they will have the option of repaying it over a period of up to five years.

Depending on the business’ situation, the amortisation period of up to five years may include an additional 12-month deferral to repay the principal borrowed.

Borrowing rates are determined by each bank, but have been designed to be at cost price.


Who can benefit from such a loan ?

All businesses, with the exception of SCIs (real estate investment companies), credit institutions, and financing companies.


What are the necessary steps to obtain a State-guaranteed loan (SGL)?

There are three essential steps to be followed in order to save time.

Contact your adviser or business adviser, who will first verify the feasibility of granting the loan, determine its calibration and, if possible, issue a pre-approval.

Once the amount of the financing is determined, visit the BPI website to obtain the State's guarantee agreement.

Complete the loan application with your adviser or business adviser.

It is possible to take out a SGL until 30 June 2021.


Do the terms of the state-guaranteed loan (SGL) change after 12 months if the borrower does not repay the loan at the end of the first year as planned?

 At the end of the 12-month period, the borrower will have the option of amortising their loan over an additional period of up to five years. The SGL will no longer have a rate of 0%: the interest rate will be determined according to the conditions set out in the contract, and based on the repayment period chosen. Moreover, the cost of the State guarantee will also be due for the coverage of this additional period.


Is it possible to repay a State-guaranteed loan (SGL) before the end of the 12-month period, without penalty?

Yes, it is possible. No penalty will be applied to early repayment of the SGL over the course of the first year. The State guarantee commission for the initial period will remain payable.


Is credit risk insurance mandatory for this State-guaranteed loan (SGL)?

No, borrower insurance is not mandatory to take out a State-guaranteed loan from Crédit Agricole, but we advise it for our customers.

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