PGE: influx of requests to the credit mediator

Levels of tension that we have not known for ten years. The credit mediation – this entity backed by the Banque de France responsible for unblocking the dialogue between a company and its bank in the event of a refusal of credit – was entered by 10,539 companies (eligible cases) between April and the end of September, according to figures released Tuesday, October 20 by the central bank.

They were only 1,000 over the whole of 2019, but we will still not reach the 16,000 eligible cases as in 2009 ”, Estimates Frédéric Visnosvky, national credit mediator. The rate of referrals has indeed slowed down considerably since the start of the school year.

Unsurprisingly, companies have entered mediation ” mainly following an initial refusal to grant a government guaranteed loan (PGE) », Underlines the institution in a press release.

Widely distributed since the end of March – at last count 123 billion euros in loans have been granted to 602,000 companies – the EMP was subject to a fairly low refusal rate, fluctuating around 2.7% of the amounts. For its part, the mediation considers having been seized for the equivalent of 1.8% of the amounts of EMP requested, or 2.3 billion euros in credits.

Lower success rate

The majority of referrals took place in April and May, when the EMP loan machine was in full swing. During the third quarter, only 2,368 referrals were received. At the same time, the production of PGE has clearly slowed down. ” Companies have massively subscribed as a precaution, because the product is interesting and perhaps also by thinking that there would not be one for everyone … “, Estimates a banking source.

Demand is running out of steam for the time being, in particular due to the deferral of charges offered to companies: they do not yet have pressure on their cash flow ”, Considers the Mediator.

Some indicators still turn orange. So, mediations were successfully concluded in 51.74% of cases, while the success rate is generally two-thirds. This is testament to the fact that companies entering mediation may already be in poor health.

Another clue: if most referrals go to very small businesses (less than 11 employees), 350 cases involve companies employing more than 50 people or requesting loans of more than 10 million euros.

Towards a tightening?

It is from 2021 that the situation could become more complicated. Several factors will then come together: the probable increase in the number of bankruptcies – which has not yet materialized – should automatically lead the banks to be more restrictive with regard to the sectors most affected by the crisis.

Another life-size test will be the scheduled end of the EMPs, initially scheduled for December 31, but which have just been extended by 6 months. We will see at this time the appetite of companies for new financing, and especially if the banks will not tighten the conditions of granting, the State no longer providing its guarantee. Already last July, a majority of eurozone banks polled by the ECB said they expected corporate credit conditions to tighten in the third quarter, but that was before the arrival of the second wave and the extension of various support mechanisms. Now all eyes are on the first half of 2021.

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