According to the Small Business Act (SBA) Fact Sheets, France offers slightly better conditions for access to various sources of financing for SMEs, but progress on this front has stalled and the return of the financial crisis has created a difficult climate for businesses.
Although the proportion of rejected loans significantly decreased from 19% in 2009 to 11% in 2011, an increasing share of French business owners say they have noticed a deterioration in the banks' willingness to provide loans. This may suggest that the continuing tightening of the standards applied to borrowers has had the effect of discouraging many entrepreneurs from applying for a loan. At the same time, the conditions for accessing public financial support, including guarantees, have also become more restrictive.
On the positive side, the cost of credit for small businesses (for loans under EUR 1 million) has fallen. It is about 11% higher than for larger enterprises (which generally need loans of over EUR 1 million), but this gap has diminished significantly since 2010.
French businesses also have relatively fewer cashflow problems due to the loss of payments from bankrupt customers (2% of total turnover, vs 3% in the EU as a whole). However, the total time it takes for customers in France to pay for a delivered good or service is close to the EU-wide average.
Institutions and systems that can facilitate access to finance, such as credit registry bureaus and the legal rights system, are as solid as in most other EU countries. The same can be said of the availability of early-stage venture capital, which amounted to 0.019% of the country's GDP in 2009.
A number of policy measures have been taken lately to improve the situation in this policy area in France. On 1 December 2011, the government asked Ren� Ricol to be the coordinator for public investment in companies. (He was formerly the coordinator for the EUR 35-billion Large National Loan, attached to the Ministry of the Economy). There are several institutions responsible for public funding, including OSEO, CDC Enterprises, the Strategic Investment Fund ('Fonds strat�gique d'investissement'), Ubifrance, the credit ombudsman and various regional bodies. The coordinator should help ensure that public funds are better managed (nationally and regionally) and will send the government proposals for improvements. One option would be to merge several national funding institutions. Another option is to have a regional one-stop shop where SMEs can apply for European, national and local grants.
In January 2012, the government announced that OSEO, the state agency that provides financial support for companies, would create 'OSEO Industrie' - a bank for companies. The bank became operational in February 2012, with funds worth EUR 1 billion. This allows it to borrow another EUR 9 billion, making a total of EUR 10 billion. These funds are mainly used to finance medium-sized companies (with fewer than 5000 employees) in the industrial sector (manufacturing or services).
Research, articles etc.
|Key indicators on access to finance|
Source: Chart compiled using ECB data
Note: Loan volumes and interest rate data for 2012 are to the period September 2012 only (due to data availability as at November 2012).
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Source: Chart compiled using AECM data
Download data [139 KB]
Source: Chart compiled using EVCA data
Download data [191 KB]
|Business angels finance|
Source: Chart compiled using EBAN data
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Appendix: ACTIONS SUPPORTING ACCESS TO FINANCE FOR SMEs (PDF) [273 KB]