Guarantees reduced by 50% thanks to Oseo Guarantee: Are you a “natural person” buyer or a “legal entity” buyer? Do you need a loan to buy a company?
Oseo, a financial organisation with whom CFK Finance often works, can provide additional services to your bank. Moreover, if you are a “natural person”, Oseo can reduce the personal guarantee that you will be asked for by half.
Patrick Strasser, regional officer of Oseo Funding and Guarantee for South Paris, explains:
• What are Oseo’s areas of activity?
Oseo is a specialised financial institution, 50% of whose capital is owned by the Caisse des Dépôts et Consignations (French Deposit and Consignment Office) and 50% by the State. We cover three areas of activity: “traditional” funding of companies in association with one or more other banks; guaranteeing loans granted by banks to companies; innovation funding, with the distribution of repayable advances for research and development projects.
• Do you also get involved in the funding of company sale or transfer transactions?
Of course! That’s why we approached the CFK Finance consultancy, the benefits of whose expertise we have already felt. Firstly, we usually co-finance company acquisitions. When a buyer, either a legal entity or a natural person, applies to one or more banks for a loan, these banks can apply to us to share the transaction. In this case, we fund a maximum of 50% of the debt. Subsequently, we can also provide a 50% counter-guarantee of the total debt. The banks are then certain to recover half of the contentious debt in the event of default by the purchased company. Of course, this service comes at a cost, which is borne by the borrower: 0.7% of the loan amount. So, if the borrower has obtained a loan at 5%, the guaranteed loan will cost him 5.7%. The bankers are reassured and the buyer obtains his loan much easier.
Moreover, one significant benefit is that, as soon as Oseo Guarantee intervenes, the guarantees requested of the buyer are limited to 50% of the loan.
• For a buyer, what is the benefit of applying to Oseo to obtain a loan?
Our intervention reduces by half the risk that a bank takes when it lends to a natural person or legal entity wanting to buy a company. Moreover, when the banks cooperate with Oseo, they know that we won’t be in competition with them because the companies are not able to open an account with us. There is no risk of our taking business away from the existing bank as we do not offer day-to-day banking services!