France plans to raise 20 billion euros ($23 billion) in quasi-equity loans for small firms hit by the coronavirus crisis by offering investors a state guarantee against the first 2 billion euros in losses, officials said, Reuters reported. Fearing failures among firms that were already saddled with record levels of debt before the crisis, the French government wants the program up and running by early next year as it battles the economic impact of the COVID-19 pandemic. Under plans to be presented to the financial sector on Monday, banks would first lend to small and mid-sized firms and then sell 90 percent of the loans to institutional investors. That would limit banks’ risk exposure to 10 percent of the loans while also steering funds to viable firms. Since a public guarantee is involved, EU state aid regulators have to give the program their blessing, particularly the interest rate that would be charged. “The discussion is going well, the European Commission is very interested in the program, but we haven’t landed on a precise number yet,” a finance ministry source said.
