PARIS, March 4 (Reuters) - The French government launched on Thursday a new guarantee scheme for quasi-equity debt to help small and mid-sized firms bounce back from the coronavirus crisis. The following are the main details: How does the guarantee work? The government guarantee will cover 30% of the potential losses on a total of 20 billion euros in debt expected to be purchased by institutional investors such as insurers. How will the scheme work? Banks will extend loans to small and mid-sized companies, which will then be sold on to institutional investors through private investment vehicles that formally carry the state guarantee. Banks will keep a 10% exposure to the loans to ensure sound lending decisions. Firms will also be able to issue subordinate bonds to the investment vehicles. What are the terms of the new loans and bonds? The loans and bonds will have maturities of eight years with a four-year grace period on principle repayment. They also have to be used to support investment and not financing existing debt. Small and mid-sized firms can borrow up to the equivalent of 12.5% of their 2019 revenues and 8.4% for middle-market firms. If they have already tapped state-guaranteed loans during the crisis, those limits are set at 10% and 5% respectively. Banks and asset managers will set the interest rate, but SMEs are expected to be charged between 4-5.5% per year and mid-market firms slightly more, according to the finance ministry. The first loans are expected to be made in early April and the programme will be open until mid 2022. (Reporting by Leigh Thomas; Editing by Toby Chopra)