European Union regulators approved Thursday a 20-billion-euro ($24 billion) French scheme to help virus-hit companies via quasi-equity loans and subordinated debt.

The European Commission said the scheme consists of a state guarantee for private investment vehicles, funded by private investors, that will acquire participating loans distributed by commercial banks as well as subordinated bonds, aimed at improving their capital position.

The French state guarantee will cover up to 30% of loans and subordinated bonds to be acquired by the private investment vehicles and these must be issued before June 30, 2022, with a maturity of eight years.

French firms went into the COVID-19 crisis last year already with a record level of debt, and they drew heavily on state-guaranteed loans from their banks as cashflow collapsed during France’s worst post-war recession.

With maturities of eight years and junior to other creditors’ claims, the new loans will have the advantage of not counting as debt on balance sheets, freeing up resources for operations and investment, critical for an economic recovery.

They will have longer maturities than the first round of state-backed loans and also carry higher interest rates. They will also have a four-year initial grace period on principal repayments and companies are required to use the money for financing investment, not previous debt, the Commission said.

While banks will make the loans to companies, the money will come from institutional investors with banks keeping exposure to ensure sound lending decisions.

Investors, mainly insurers, who provide the cash will get better yields than those offered in more traditional markets while the state guarantee for potential losses reduces the risks of exposure for smaller firms.