On-line Lender October Explains how Buyers can Assist Companies Deal with COVID-19 with French Authorities Assured Loans

October, a number one European on-line lender, confirms that State assured loans had been just lately launched in France by the nation’s authorities with a view to assist companies through the COVID-19 pandemic, as they is likely to be struggling to keep up operations.

October explains that the French authorities goals to make it “much less dangerous” for lenders to finance SME initiatives by agreeing to cowl a proportion of the loss in case of a default. This could be certain that there’s sufficient liquidity being supplied to SMEs.

The European market lender notes:

“October can distribute French State Assured loans. The State Assured loans are completely different from our commonplace loans. The French authorities has imposed quite a lot of necessities and limitations to the situations of the mortgage, earlier than granting the assure.”

October explains that each one State assured loans in France are, at first, 12-month loans with “one capital reimbursement and one cost of two% curiosity on the finish of the mortgage.” However what makes the State assured mortgage completely different from others is that the borrower has the choice to increase the mortgage after the primary 12 months or 12 months and “unfold the reimbursement over 1 to five years.”

The borrower additionally has the choice to completely repay their excellent mortgage. In the event that they do that, then the lender will get the capital that they had loaned, together with 2% curiosity paid to their October account “on the finish of the 12th month.”

One other state of affairs is when the borrower pays 2% curiosity through the course of the primary 12 months, nonetheless, they don’t repay any capital. On this case, the mortgage will get paid again over the course of “1 to five years, by way of month-to-month annuity funds.” The October crew confirms that this era is “on the discretion of the borrower,” and that on this case, they’ll inform purchasers in regards to the new period and fee. October additionally mentions that the “90% state assure will nonetheless apply.”

(Observe: for extra particulars on mortgage phrases and situations, test right here.)

The October crew states:

“With a State assured mortgage you’ll be able to assist firms get by way of the coronavirus disaster, whereas on the identical time reaching a return in your funding. The scale of that return relies on whether or not the mortgage will likely be prolonged and the period of the extension. October can distribute State Assured loans until the top of this 12 months, when the assure ends.”

As coated in August 2020, October reported a “file month” with 55 initiatives receiving funding throughout July 2020.  As reported in July 2020, October closed financing for its 100th Spanish firm.

In June 2020, October added a brand new predictive danger device to the platform to facilitate instantaneous loans. In March 2020, buyers of October permitted a 3-month freeze on mortgage capital repayments, following the COVID-19 outbreak.