Access to bank financing for companies 2020Q2
Published on 4 August 2020
Demands for new cash credits reached exceptional levels and have been widely satisfied
- The share of SMEs requestsing new cash credits continued to escalate at 42% of businesses after 17% in the preceding quarter; that of VSEs also increased very strongly at 28% of businesses after 13% in Q1 2020. On the opposite, the proportion of businesses demanding for new investment loans further slowed down as in the preceding quarter, by 3 points for SMEs at 13% of businesses, and by 2 points for VSEs at 6% of businesses. Anticipating a bank refusal was rare: less than 2% of entrepreneurs censored themselves.
- Cash credit supply for SMEs substantially improved and reached its highest historical level with 94% of granted credits, in connection with access to state guaranteed loans (PGE). Unlike the first quarter, very few requests were under investigation when questioning SMEs. The supply rate for investment loans raised by 3 points with 95% of SMEs that were fully of almost fully granted their credits. For equipment loans more specifically, the rate of access stayed constant at 91%.
- Access to cash credits for VSEs strongly expanded as a result of the implementation of state guaranteed loans and reached an all-time high, close to that of SMEs, with 90% of granted requests. As for SMEs and unlike the first quarter, very few requests were still in progress at the time of the survey. The rate of access to investment loans slightly decreased for the second consecutive quarter, with 84% of VSEs that were fully or almost fully granted their credits after 85% in Q1 2020. Regarding equipment loans, the supply rate reduced by 5 points this quarter to reach 82%.
Share of businesses that have requested and been granted new credits*
Cash credits
Investment loans
* 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 - Very small enterprises (VSE: 0 - 9 employees)
provided by FCGA and Banque de France
- The share of VSEs that have requestsed new financings significantly increased for cash credits at 28% of businesses after 13% in Q1 2020 and 6% in Q4 2019. Conversely, the demand rate for investment loans decreased by 2 points at 6% of VSEs.
- Access to cash credit strongly expanded and reached an all-time high with 90% of VSEs that were fully of very substantially granted their requests this quarter, after 56% in Q1 2020 (where 12% of requests were pending at the time of the interview) and 71% in Q4 2019.
- The rate of access to investment loans decreased by 1 point with 84% of granted requests (fully or over 75%). Concerning equipment loans specifically, the supply rate amounted to 82%, namely 5 points less than in the preceding quarter.
2- 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 decreased and amounted to 37% after 38% in the preceding quarter. These requests were still widely satisfied, at 96%. 54% of SMEs mobilized credit lines this quarter, namely 1 point less than in Q1 2020.
- Regarding new loans - excluding the use of available credit lines - : -> The proportion of SMEs that have applied for new cash credits raised by 25 points and reached 42% of businesses this quarter, after a first increase of 11 points in the previous quarter.
- 3% of SMEs reported a rise in the total cost of financing, one point more than in the last quarter.
Cash credit supply for SMEs substantially improved and reached its highest level observed in the survey since 2012 with 94% of SMEs' requests of cash credits that were fully or almost fully granted, after 67% in Q1 2020 (where 27% of requests pending at the time of the interview) and 89% in Q4 2019.
-> After a drop of 6 points in the previous quarter, the share of SMEs that have requestsed new investment loans further decreased by 3 points this quarter, at 13% of businesses.
The supply rate for investment loans improved by 3 points with 95% of SMEs' requests that were fully or very substantially granted. About equipment loans specifically, access stayed constant at 91%.
3 - Mid-tier enterprises (MTE: 250 - 4 999 employees)
provided by Banque de France
- 50% of MTEs submitted requests for credit lines (49% in Q1 2020). 64% of those MTEs whose requests were satisfied drew down available credit lines, against 58% in Q1 2020.
- The share of MTEs that requestsed new cash credits raised sharply as in the previous quarter, with 40% of businesses that haved applied for such credits, after 22% in Q1 2020 and 10% in Q4 2019. The supply rate (fully or over 75% of the requestsed loans) increased by 24 points at 91% and recovered a level close to that of end 2019.
- The proportion of MTEs that applied for new investment loans settled down around the level reached in the preceding quarter with 19% of businesses that requestsed such financings this quarter against 18% in Q1 2020. The rate of access improved by 4 points with 96% of MTEs' requests that were fully or almost fully granted. Concerning equipment loans specifically, the supply rate also improved and reached 89%, after 87% in the previous quarter.
- 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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