Pays de la Loire Garantie is a guarantee fund which goal is to facilitate SMEs' access to bank credits through a guarantee that can reach up to 70%
The Region funds the PDL Garantie Fund and has delegated the management to BPI. BPI is a privileged partner given its financial expertise and its status as a financial institution that allows it to set up large-scale bank guarantees.
PDL Garantie can benefit SMEs and VSEs in any sector, excluding financial intermediation activities, promotional activities and real estate rentals, agricultural activities achieving less than €750.000 turnover. This fund can be mobilised in the context of business creation; transfer; acquisition and development of new equipment; international development ; to strengthen the financial structure and the cash position ; to support innovative companies. Intervention criteria are sufficiently broad to cover the bulk of loan applications solicited by companies and cover all development stages.
The guarantee is requested by the bank directly to BPI, which decides whether or not to mobilise the PDL Garantie Fund or its own fund, according to the level of coverage requested by the bank. In that case, BPI requests the Region's agreement to mobilize the PDL Garantie fund.
Of all financial instruments available, guarantees provide the most effective lever for convincing banks to accept risk: the informational asymmetry between bankers and companies, and between the characteristics of certain development phases, makes it necessary for funding institutions to seek security for those loans considered as the most high-risk.

Resources needed

The PDL Garantie Fund is endowed with €40M through €2M instalments.
A Regional Funds Insurance Fund was set up to insure the risk of insolvency of the PDL Garantie Fund.
Internally 2 agents are involved in the day to day management, BPI receives an annual fee for each guarantee.

Evidence of success

Summary 2018 (excluding seed stages): 97 cases supported (86 companies) for a guaranteed loan amount of € 9M (52% in Transmission / 20% strengthening of financial structure / 16% in development / 12% in creation).
Today, taking into account the multiplier coefficient used by BPI (5 until 2015 then objective of 6 in 2017 and 7 in 2018) and the maximum intervention rate of the fund, it is estimated that for € 1 Region, the guarantee fund can mobilise € 14 of bank financing.

Difficulties encountered

Since the guarantee is issued by the bank and not by the company itself, the latter often is not aware of the co-guarantee provided by the Region. To remedy this, the Region systematically sends a letter to the company. When the Region is identified, companies appreciate the assistance provided.

Potential for learning or transfer

While corporate finance sources tend to expand to new tools (eg crowdfunding), the French corporate finance system remains very focused on bank financing. In this context, guarantee tools have a real leverage effect on bank agreements. For local authorities, investment in a guarantee fund is quite virtuous in terms of public funds use to the extent that these endowments are reusable (in theory) as guarantees are lifted.
PDL Garantie provides an effective response to business cash flow problems by allowing them easier access to bank financing and is an essential tool for the deployment of the entire regional toolbox. The advantages of the guarantee: for the bank: risk division with cash flow maintenance; better management of solvency ratios, search for external expertise, a second look; for business executive: limit to personal guarantees; for the company: easier access to financing.

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Main institution
Conseil Régional Pays de Loire
Pays de la Loire, France
Start Date
January 2000
End Date


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