Growth Transmission Loan: Bpifrance finances your acquisitions with no personal guarantee
Taking over a business is often an uphill struggle, especially when it comes to securing finance. Banks demand guarantees, sometimes over your personal assets. Bpifrance has just launched a new solution that changes the game: theGrowth Transmission Loan.
Its major advantage? No guarantee over your personal assets or the company's assets.
Who is this loan for?
The Growth Transmission Loan targets entrepreneurs who want to:
- Buy company shares(shares or partnership interests)
- Acquire a going concern
Whether you are an external buyer or a partner wishing to buy out co-partners, this loan may concern you.
Key features
Amount: €50,000 to €5,000,000
The envelope is significant. It can finance both small takeovers (local retail, crafts) and larger operations (industrial SMEs, service businesses).
Cap: 40% of total debt
The Growth Transmission Loan cannot finance your entire project. It is capped at40% of total debtraised for the operation.
In practical terms, if you need €500,000 of debt for your acquisition, Bpifrance can lend up to €200,000. The rest must come from other sources: mainstream bank, personal contribution, other investors.
Term: 3 to 7 years
You can spread repayment over a period suited to your situation and the company's ability to generate cash flow.
Capital repayment deferral: up to 24 months
This is a major advantage. You can benefit from acapital repayment deferral of up to 2 years. During this period, you pay only interest.
This deferral gives you time to:
- Take over the business
- Implement your development plan
- Generate initial results before starting to repay capital
No personal guarantee
This is the scheme's strong point. Bpifrance takesno real security:
- No mortgage on your home
- No charge over the company's assets
- No personal surety
Your personal assets remain protected.
How does it fit with other financing?
The Growth Transmission Loan is designed to becomplementaryto other financing solutions:
With a mainstream bank
You build a financing package with your bank. It agrees to finance 60% of the debt. Bpifrance tops up with the remaining 40% via the Growth Transmission Loan.
With Bpifrance Transmission Guarantee
Bpifrance can also guarantee the loan granted by your bank. The two schemes are cumulative, which may reassure your banker and facilitate obtaining the main financing.
Context: partnership with the Institute of Chartered Accountants
This new loan forms part of a partnership recently signed between Bpifrance and theNational Council of the Institute of Chartered Accountants(CNOEC). The stated aim is to facilitate business transfers, a major issue as many directors approach retirement age.
Your accountant can therefore be a key contact to guide you towards this scheme and support you in preparing the application.
How to benefit?
To apply for a Growth Transmission Loan, you can:
- Contact Bpifrance directlyvia their website or regional network
- Go through your accountantwho can put you in touch with the right contacts
- Discuss it with your bankerwho generally knows Bpifrance schemes
The application will be assessed on the strength of your project, the target company's health and your ability to develop it.
Key takeaways
- TheGrowth Transmission Loanfinances acquisitions of shares or going concerns
- Amount:€50,000 to €5,000,000, up to 40% of total debt
- Term:3 to 7 yearswith possible 24-month deferral
- No personal guaranteenor charge over company assets
- Schemecomplementaryto mainstream bank financing
- Contact your accountant or Bpifrance to find out more
If you have a business acquisition project, this new scheme deserves consideration. The absence of personal guarantee significantly reduces your risk exposure and may allow you to complete a project that seemed out of reach.