French wine industry encouraged to make wide scale use of State-secured loans

Wednesday April 01 2020 by Vitisphere

 Cash flow problems must be quickly removed, “there are already enough challenges with the scarcity of sales outlets, logistics and manpower problems”, stressed Bernard Farges. Cash flow problems must be quickly removed, “there are already enough challenges with the scarcity of sales outlets, logistics and manpower problems”, stressed Bernard Farges. - Photo credit : CIVB

As vines gradually emerge from their winter slumber, wine marketing finds itself in isolation, “leaving a huge gap”, said France’s National Federation of AOC Wine and Brandy Producers (CNAOC) in its latest statement. “Without any money coming in, how can we pay the employees we absolutely need to continue managing our vines”? To rise to the challenge, wine companies must replenish their cash flow by using State-guaranteed loans, it argued. Announced on 16 March, the €300 billion national fund has been made available in banks since 25 March for businesses across-the-board. “The State-secured loan is a one-year cash loan. The loan will be able to cover up to three months of turnover”, specified the Ministry of the Economy.

Capped at the equivalent of a quarter’s business, the system “will include deferred amortization over this period. The company may decide, at the end of the first year, to amortize the loan over an additional 1, 2, 3, 4 or 5 years”, added the Ministry. The public security amounts to 90% for companies with fewer than 5,000 employees and less than €1.5 billion in turnover. Whatever the company, “firms, especially the largest ones, which do not meet their obligations in terms of payment deadlines will not have access to the State guarantee for their bank loans”, specified the government. Once the financial arrangements have been approved by the bank, the procedure subsequently moves to the dedicated website of the Public Investment Bank (BPI). The scheme is open until 31 December 2020 and up until the end of April 2020, each company can only apply for one secured loan.

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