Loan on trust

Project information

Index: 1335R4
Acronym:FIN-EN
Priority:1: Innovation and the knowledge economy
Sub Theme:Entrepreneurship and SMEs
Location FRANCE CENTRE-EST Auvergne Start/End date of the practice
Start: 2009
End: 2019

Topic of the practice

Leverage

Good Practice Information

The loan on trust is directly provided to the project owner, not to the company. It enables to consider this funds as equity and not debt and then to achieve a high leverage effect. Moreover, it enables to have more credibility because of the the company leader presents its project in front of a jury composed of experts (bankers, lawyers, etc.) who make the decision to provide the loan.
Then, bankers have the choice to complete with a bank loan, and it's not always the case, but it really increases the reliability of the project.

Evidence of success

This practice is successful because it achieves a high leverage of bank loans, as the national regulation requires to complete the loan on trust with a bank loan. For example, loan on trust structures invested 3 448 108 € (JEREMIE funds) into companies and it enables an amount of associated bank loans of 36 600 975€.

Contact details to obtain further information on the practice

Franck Alcaraz

Regional Council of Auvergne

f.alcaraz@cr-auvergne.fr

www.jeremie-auvergne.eu

Annex completed on: 09-30-2014

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