12. Financial Assistance for Starting a Business in France

1. Introduction
2. Start-Up Social Security Relief
3. Regional Development Schemes
4. Bank Finance
5. Assistance with Employee Costs

12.3. Bank Finance for a New Business in France

The banks are required by the French Government to assist new business’s with finance so, provided you have a decent financial plan, you will usually find them quite accommodating when it comes to small scale unsecured loans at reasonable rates.

You should make enquiries to your bank about a start-up loan Prêt à la Création d'Entreprise (PCE) for up to €7,000, which can be obtained without the need to offer security against the loan. Whilst you are expected to demonstrate that you are bringing some of your own capital to the table, it is not a rule that is uniformly enforced. You will, however, be expected to have a business account.

The loan is available for start-ups less than three years old and only provided you have not already received start-up finance. The rate and duration of the loan is determined by negotiation with the bank but is normally on a favourable fixed interest basis for up to 5 years. You are entitled deferred repayment in the first six months/year of the loan and no arrangement fees are payable.

If you are looking for medium to longer-term financing then approach your bank about a Prêt CODEVI, which is a cheap source of unsecured finance for a business, but is restricted to certain business sectors. More generally the loans are called Prêts Bancaires aux Entreprises (PBE).

Expect in each case to have to present the bank with financial forecasts, (prévisions financiers or plan de trésorerie), before they will approve the loan.

If, because of previous unemployment or low income, you are having difficulty in obtaining a bank loan, then you may be able to get an interest free loan from one of the public-private partnerships.

These loans come under different names, called either Prêt d'honneur,Fonds de cohésion sociale, or Prêts solitaires. Their primary purpose is to act as 'mezzanzine' finance to enable a new business to obtain access to a bank loan.

In some cases the lender may ask for a guarantor for up to 50% of the loan, although in the case of Fonds de cohésion sociale the government acts as guarantor for part of the loan.

The loans are available through different organisations whom you can contact below. Alternatively, approach your bank, and they may be able to assist you with an application.

The focus of each organisation is slightly different, with Réseau Entreprendre, in particular, focusing on companies with the prospect of 5 or more employees. ADIE focus on those who are coming out of unemployment, social security claimaints, and those who cannot get access to the regular loan finance.

• Initiative France
• Réseau Entreprendre
• Association pour le droit à l'initiative économique
• FranceActive

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