On 23 April 2020, the French Parliament adopted amendments, published in the French Official Journal (Journal Officiel) on 25 April 2020, aiming inter alia at extending the list of entities authorized to grant State-guaranteed loans – such loans being one of the key measures taken by the French State in response to the COVID-19 pandemic – to lenders through crowdfunding platforms.
As a reminder, the guarantee granted by French State, for a total amount of EUR300 billion, initially applied to new loans (subject to certain conditions regarding notably the amount or deferrals) granted between 16 March 2020 and 31 December 2020 by credit institutions and financing companies duly registered in France or in another European Union Member State and benefiting from a passport in France, to all companies except for real estate companies, non-financing companies (which criterion was replaced by these new amendments with “other than credit institutions or financing companies”) and companies subject to safeguard, receivership or liquidation proceedings and professional recovery resulting from the implementation of the provisions of Book VI of the French commercial code (code de commerce).
Proposed by the Senate, amendment No. 341, modifying article 6 of the finance bill for 2020, which applies to crowdfunding platforms actively involved in financing businesses (notably to small and medium-sized entreprises) extend, upon certain conditions, the State-guaranteed loans regime, limited to date to credit institutions and financing companies, to lenders using crowdfunding intermediary (intermédiaire en financement participatif, CI).
CIs are further subject to the provisions of the French administrative Order dated 23 March 2020 which details the eligibility of the loans to the State guarantee (in terms of duration, interest rate, security interests, etc.). This Order further provides conditions for liability vis-à-vis the lenders notably for breach of certain good conduct rules and risk coverage requirements by professional civil liability insurance, as well as conditions related to notification by the platform to BPI France and financial conditions of the loans intermediated by the CI through the crowdfunding platform.
This amendment is therefore welcome insofar as the crowdfunding platforms are actively involved in financing businesses, particularly small and medium-sized enterprises.
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