The French government aims to guarantee 3 billion euros ($3.6 billion) in quasi-equity long-term loans to bolster the balance sheets of struggling small- and mid-sized firms, Finance Minister Bruno Le Maire said in a newspaper interview. French firms’ debt burdens were at record levels even before the coronavirus outbreak and many have increased borrowing to keep operations running as cashflow dwindled during the crisis. The state has already offered to guarantee up to 300 billion euros in bank loans, but the sorry state of balance sheets at some smaller businesses has led to calls from the central bank and economists for support in the form of equity to stave off a wave of bankruptcies. Le Maire told Les Echos business newspaper the state would guarantee 3 billion euros of loans to SMEs with a minimum duration of seven years, helping them to raise 10-15 billion euros. The loans would be accounted for as equity on firms’ books, which means they should not add to their debt burdens, and they would not confer corporate governance rights as equity usually does. “These long-term loans are indispensable for SMEs whose debt loans are too high, holding back their development and investments,” Le Maire said. He added that discussions were still underway with banks on how much firms would be charged for the loans and said lenders would decide who gets them to ensure they go to companies with viable businesses. Le Maire also said that banks had agreed to charge between 1-3% depending on loan duration after the first year for lending under the 300-billion-euro guarantee programme. During the first year, SMEs pay only 0.25% under that programme and bigger firms 0.50%.