Lucien Bechtold: a win win collaboration

Published on 28 June 2018



Questions to Lucien Bechtold, Chief Executive Officer, Mutualité de Cautionnement (MC)

What is the role of the MC?

The Mutualité de cautionnement (MC) was created in December 1969 by the Chamber of Commerce on the initiative of the clc and Horesca, with the aim of facilitating access to bank funding for Luxembourgish businesses. The aim of the MC is to address the lack of guarantees for small and medium-sized enterprises (SME) by offering guarantor loans to businesses whose guaranties to the banking estalishments are insufficient. The MC, which in October 2016 joined up with the new one-stopshop, the House of Entrepreneurship, supplies advice and practical support to entrepreneurs looking to set up their funding plan.

As of 1 January 2018, the MC has reorganised the way it works. Tell us more.

Thanks to an increase in capital, the MC will now be able to assist with larger projects, providing guarantor loans of up to 250 000 euros per case, without however surpassing 50% of the actual loan to be guaranteed. Historically, the main clientele of the MC was made up of businesses from the traditional sectors (retail, hospitality and catering, etc.) This has now expanded to include innovative companies and real estate investments for professional use. In addition, the MC has signed a framework convention with the main banking establishments providing funding for SMEs, making it the bank's responsibility to put in a request to the MC for a guarantor loan on behalf of an entrepreneur.

What are the conditions for receiving a guarantor loan?

All traditional and innovative companies registered in Luxembourg and holding a valid autorisation d'établissement are eligible. The requested guarantor loan must be used for investment projects with real and viable prospects. The MC wishes first and foremost to finance productive investments rather than cash flow needs or financial restructuring. It must be the bank that makes the request for the guarantor loan on behalf of its client.

Can you give us a few concrete examples of recent projects the MC has helped?

Over 40% of the MC's investments go to start ups, and 35% to buyouts, with 25% invested in the development and modernisation projects of existing companies. The majority of guarantor loans (40%) were attributed to the traditional commerce sector (food, textile and retail industries), to the hospitality and catering industry (31%) and to the service industries (29%). Without the guarantor loans from the MC, many a start-up, buyout and development project would not have found sufficient funding.

What are the main advantages of guarantor loans for entrepreneurs?

The aim of the MC is to facilitate access to bank funding for SMEs. A guarantor loan from the MC thus provides entrepreneurs with an important tool with which to back their request for a bank loan and to negotiate the terms of their funding.

You have worked closely with the BusinessMentoring programme since it started. Why is this collaboration important?

We have indeed worked with the BusinessMentoring programme for a long time, and have supported many cases together, notably Flexcom and Lunch Sàrl. The two key needs of entrepreneurs today are finding funding and receiving guidance in the management of their business projects. Our collaboration brings these two aspects together. The advantages are twofold: on the one hand we can offer funding from the MC to the mentees of the BusinessMentoring programme and on the other hand we can offer "bespoke" guidance from a mentor for 6 to 18 months, to the beneficiaries of guarantor loans.  This has therefore proved to be a win-win collaboration

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Interview by Rachel Gaessler




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