All you need to know about Relance Equity Loans and Relance Bonds​

Obligation France Relance

All you need to know about Relance Equity Loans and Relance Bonds​

On March 25, 2021, the Ministry of the Economy, Finance and Recovery at Bercy published decree no. 2021-318 [1] for the launch of the Prêts Participatifs Soutenus par l’Etat scheme (Prêts Participatifs Relance and Obligations Relance) announced in early March by Economy Minister Bruno Le Maire. The scheme, aimed at SMEs and ETIs, is designed to boost investment by companies affected by the COVID-19 crisis.
The Relance scheme proposed by Bercy consists of 20 billion euros in loans, 30% of which is guaranteed by the French government, in two parts:

14 billion euros in Prêts Participatifs Relance distributed by banks ;
6 billion euros in Relance Bonds subscribed by investment funds (insurers, mutual insurers, etc.).
In all, the government’s 30% guarantee represents 6 billion euros.

All ETIs and SMEs with sales of €2 million or more in 2019 are eligible for this Relance scheme.

The aim of this scheme is to improve companies’ solvency ratios, so that they can invest in the growth of tomorrow. These Equity Loans are, in fact, akin to quasi-equity. Without waiting for the economy to improve, companies can :
– hire, 
– invest in improving production facilities,
– finance R&D, etc.

How do Relance Participating Loans and Relance Bonds work?

For each company, the cost of the PPSE is free and will be adapted to its situation.

The aim is for companies to benefit from attractive interest rates for quasi-equity loans. These rates are expected to be between 4% and 5.5% for SMEs, and between 5% and 6% for ETIs. This cost includes the cost of the government guarantee, i.e. 0.9% for SMEs and 1.8% for ETIs.
What’s more, to enable long-term investment, the PPSE has a maturity of 8 years:


– For Prêts Participatifs Relance , an 8-year maturity with a 4-year grace period for PPSEs.
– For Relance Bonds, an 8-year bullet maturity.

What are the advantages of state-supported equity loans?

For corporate borrowers (SMEs and ETIs), the PPSE scheme offers 3 main advantages:

Attractive rates for quasi-equity financing: Although the cost of the PPSE scheme is unrestricted, companies are likely to benefit from rates of between 4 – 5.5% for SMEs and 5 – 6% for ETIs for quasi-equity financing over an 8-year period. This will enable companies to strengthen their equity capital and ratings, which have been weakened by the COVID-19 crisis.

Leverage effect: With the strengthening of equity capital and ratings, Prêts Participatifs Relance or Obligations Relance should be seen as leverage financing that can be supplemented by traditional bank financing that would not have been possible without PPSEs.

A solution that protects companies’ capital: Relance Bonds enable companies not to open up their capital and thus retain decision-making power over their business. This is a significant advantage for family businesses or group subsidiaries.

Can Participatory Loans be combined with PGEs?

If the sum of PGE-PPSE amounts borrowed exceeds the threshold of 25% of 2019 sales, companies will be entitled to a reduced PPSE. i.e. :
– 10% for SMEs
– 5% for SMEs

Clearly, by combining PPSE and PGE, companies can borrow up to 35% of their 2019 sales.

How can I obtain a Relance Participating Loan or Relance Bonds?

To qualify for a state-supported Equity Loan or for Stimulus Bonds, you need to put together a dossier demonstrating your rebound potential, including the following elements:

– A minimum FIBEN rating of 5+.
– A detailed analysis of the company’s ability to rebound and its potential.
– A document presenting the investment project and its prospects
– Long-term operational and financial modeling, demonstrating the positive impact of the investment.

The borrower will need to reassure financiers of the economic relevance of the investment project. It must also demonstrate its resilience.

Good to know

The We fundia inter-company loan platform supports you in your search for financing via bonds (simple, bullet or Relance) with partner funds. We fundia helps SMEs and ETIs with the support of a lead company in their sector/industry (financing part of the project) to find co-financiers.

The participation of a large company in the financing of an SME or ETI in the same sector reassures co-financiers (funds, etc.) about the viability of an investment project.

[1] Decree no. 2021-318 of March 25, 2021 relating to the State guarantee provided for in article 209 of law no. 2020-1721 of December 29, 2020 on finance for 2021.

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