The loan is concluded for a period of 4, 6 or 8 years, and even up to 10 years depending the latest amendments, and is subordinated to the existing and future debts of the borrower. Derogations allow the loan to be called in certain situations of financial difficulties suffered by the borrower. Recent amendments have also provided for the option of repaying the entire loan in advance on the one hand, and the intervention of the Region by granting of a 30% tax credit in the event of permanent loss of capital.
The capital thus lent must be allocated to carrying out the company’s activity. It can consequently not be distributed in the form of dividends or capital, or be reinvested as capital in a legal entity controlled by the same persons as the borrower.
The capital lent was initially limited to €100,000.00 per borrower and €50,000.00 per lender. These limits have been raised to €250,000.00 and €125,000.00 respectively. The interest must be between a minimum of half the legal rate and a maximum of the legal rate in force, i.e. 1.75% for 2021.