Access to bank financing for companies 2020Q1
Published on 5 May 2020
Demand for new cash credits reached an all-time high
- Demand for new cash credits of SMEs tripled at 17% of businesses after 6% in the preceding quarter, as a consequence of the crisis that has affected businesses' liquidity at the end of March; for VSEs it also increased very strongly at 13% of businesses after 6% in Q4 2019. These data include demand for state guaranteed loans (PGE) whose nature differs from usual bank loans. On the contrary, Demand for new investment loans slowed down, by 6 points for SMEs (16% of businesses) and by 3 points for VSEs (8% of businesses).
- Cash credit supply for SMEs declined to 67% this quarter. However, this fall must be interpreted with caution given the high increase in requests. When questioning SMEs (between March, 27 and April, 7), many cash credit demands were under investigation; pending cash credits represented 28% of cases, corresponding to the sharp rise in demand for state guaranteed loans. Access to investment loans lowered but remained at a high level, at 92% after 97% in Q4 2019. For equipment loans more specifically, access stayed constant at 91%.
- Access to cash credits for VSEs strongly tightened to 56% of granted requests this quarter. As for SMEs, this decline is to be put into perspective given the rapid increase in requests. A significant share was still being processed at the time of the survey (13% of cases). Available data regarding state guaranteed loans show that 90% of them were granted to VSEs, along with a refusal rate of less than 2.5%. Access to investment loans decreased by 3 points with 85% of VSEs that were fully or almost fully granted their credits. Regarding equipment loans, access raised by 4 points this quarter and reached 87%.
Financing requests and grants for SMEs and VSEs*
Cash credits
Request for new credits
Grants of crédits
(fully or over 75%)
(fully or over 75%)
Investment loans
Request of new credits
Grants of crédits
(fully or over 75%)
(fully or over 75%)
* Not seasonally adjusted data, in %; except for the use of credit lines earlier granted
Source : Banque de France (Statistics, Studies and International General Directorate ) and FCGA
Scope: Enterprises with real decisional autonomy regarding requests for credit; SMEs: 10 - 249 employees; VSEs: 0 - 9 employees
The Banque de France carries out a quarterly survey on the access to bank financing of companies. 4,000 small and medium-sized companies (SMEs) and 400 mid-tier companies (MTEs) have answered; as well as 2,500 very small companies (VSEs) thanks to a partnership with the Fédération des Centres de Gestion Agréés (small firms authorised management centers federation).
Additional information
1- Small and medium-sized enterprises (SME: 10 - 249 employees)
provided by Banque de France
- SMEs can apply for credit lines that remain available over the year, most of the time at the beginning of the year, and/or for various types of cash facilities during the year.
-> The proportion of SMEs applying for credit lines slightly increased and amounted to 38%, after 36% in the preceding quarter. These requests were still widely satisfied, at 94%.
-> 55% of SMEs mobilized credit lines this quarter, namely 6 points less than in Q4 2019 (61%). - Demand for new cash credits increased by 11 points, at 17%.
-> Cash credit supply for SMEs declined compared to the previous quarters, in a context of a strong increase in demand. 67% of SMEs' requests of cash credits were fully or almost fully granted, against 90% on average over the last four quarters. 28% of requests were pending at the time of the interview. - Demand for new investment loans decreased by 6 points, at 16%.
-> Access to investment loans lowered but remained high with 92% of SMEs' requests that were fully or very substantially granted, after 97% in Q4 2019. About equipment loans specifically, access remained unchanged at 91%. - 2% of SMEs reported a rise in the total cost of financing, one point less than in the last quarter.
Regarding new loans - excluding the use of available credit lines - :
2 - Very small enterprises (VSE: 0 - 9 employees)
provided by FCGA and Banque de France
- Demand for new financing from VSEs significantly increased for cash credits (13% after 6% in Q4 2019) but reduced for investment loans (8% after 11% in Q4 2019).
- Access to cash credit strongly tightened, there too in a context of rapid increase in demand. 56% of VSEs that were fully or very substantially granted their requests this quarter, namely a drop of 15 points compared to the preceding quarter. 13% of requests were pending at the time of the interview.
- Access to investment loans decreased by 3 points with 85% of granted requests (fully or over 75%). Concerning equipment loans specifically, the supply rate raised and amounted to 87%, after 83% in the preceding quarter.
3 - Mid-tier enterprises (MTE: 250 - 4 999 employees)
provided by Banque de France
- 50% of MTEs submitted requests for credit lines, 1 point less than in the last quarter. Only 58% of those MTEs whose requests were satisfied drew down available credit lines, against 64% in Q4 2019.
- Demand for new cash credits raised sharply compared to the previous quarters with 22% of MTEs that requested such credits (10% in Q4 2019). The supply rate (fully or over 75% of the requested loans) fell by 27 points at 67% but 29% of requests were pending at the time of the interview given the rapid increase in demand.
- Demand for investment loans drastically decreased with 18% of MTEs that requested financing this quarter against 30% in the preceding quarter. Concurrently, access contracted by 4 points but stayed at a high level: 94% of MTEs' requests were fully or almost fully granted. Concerning equipment loans specifically, the supply rate slightly improved and reached 89%, after 87% in Q4 2019.
- Only bank financing is considered here. MTEs also access to financing through private debt issuance, which is not covered by this survey.
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