Since the international financial crisis of 2008, banks have become more cautious with companies and have strict regulatory constraints, so that credit activity is down . The overall annual volume of new loans granted to companies in France has fallen by one third between 2006 and today, and business investments, on their side, are 12% lower than those recorded 6 years ago. There are still ways to finance his business.
New avenues are explored to finance his company.
Good Finance is an option. To support the growth of French companies, the public investment bank offers investment loans to institutions of all sizes . Whether they are “long or medium term”, “future” or “growth”, all aim at the development of companies and reassure partner banks, especially when it comes to VSEs and SMEs, which traditionally find it more difficult to finance their projects, given their size or risk profile.
Another alternative to traditional banking institutions is crowdlending or crowdfunding through the loan. This is a secure and fast financing method that started a year ago in France. It is based on the lending of individuals and legal persons to small businesses and thus allows to circumvent the traditional ways of accessing credit.
Let’s take stock of the advantages and disadvantages of these two modes of financing.
Good Finance and its complementary loan offer for bank loans.
Good Finance supports French companies at all stages of their development and plans to invest 8 billion euros by 2017. Created in 2013 at the request of François Hollande, it already deploys a wide range of loans to finance financing. growth, but also tangible and intangible assets or working capital requirements.
The advantage of development loans granted by Good Finance is threefold: they do not require personal guarantees of the manager or guarantee on the assets of the company; they are for a period of between five and seven years and may be accompanied by a grace period of one or two years; Finally, they intervene in co-financing of the bank of the company and thus play a leveraging role in obtaining bank financing.
Among the offers proposed to finance his company:
- The long or medium term loan: designed for all companies, including those under three years, it can finance their development investments . This may include purchases of land or existing buildings, new construction, a transfer of business, or a business recovery. The medium and long-term loan must be more than 40,000 euros, and must intervene in co-financing a bank loan , that is to say that Good Finance shares the financing with the bank at 50/50. The loan rate is identical to that of the bank that intervenes jointly.
- The Growth Loan: It is aimed at SMEs and mid- cap companies ( SMEs ) created more than three years ago and financially sound, who wish to make intangible investments or increase their working capital requirements (BFR). This may involve costs of upgrading, expenses related to the environment, costs of building or renovating a store, acquisition of lease rights, recruitment and training fees, development work or advertising expenses. To benefit, no guarantee on the assets of the company, nor on the inheritance of the leader is required. On the other hand, as for most Good Finance loans, a banking partner is needed , at the rate of 1 euro of development contract for 1 euro of accompanying loans, or of own funds contributed. The loan amount (fixed or variable rate) can range from 300,000 euros up to 5 million euros . It is for a period of 7 years including 24 months of deferred capital depreciation.
To each his option
Private banking, Public Investment Bank, crowdfunding platforms, the supply of credit to businesses tends to expand. New actors enter the scene, or at least gain importance, to support business development projects. In the face of market developments, it should not be overlooked . Depending on a company’s structure, maturity, and state of development, needs may vary and with them the most appropriate financing.