Demands for investment loans increased again for SMEs, yet remained below the pre-crisis level
Against the backdrop of a stabilization of demands for cash credits at pre-crisis levels, requests for new investment loans remained low compared to 2019 data. Supply rates kept high levels for both credit types, notwithstanding a slightly dwindling trend for cash credits grants.
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 500 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). NB: bank credits alone are examined in this survey; MTEs have access to private financing options, which provides them with financing solutions not covered by this survey.
Data not seasonally adjusted, in %; excluding use of previously granted credit lines
Scope: companies with autonomy to decide on credit applications: VSE = 0 - 9 employees; SME = 10 - 249 employees; MTE = 250 - 4999 employees
One year after the peak of Q2-2020, demands for new cash credits stabilized at a pre-crisis level: the share of Very Small Enterprises (VSEs) asking for new credits over the last quarter fell down to 5% and to 6% for Small and Medium Enterprises (SMEs). The share of Mid-Tier Enterprises (MTEs) remained at 7%. Supply rate for cash credits stayed very high compared to the pre-crisis level, in spite of a 1-point decrease at 79% of VSEs and a 6 points drop at 83% of MTEs having fully or almost fully been granted their credits. The supply for SMEs gained 1 percentage point at 87%.
Demands for new investment loans stabilized below the pre-crisis level: 6% of VSEs applied for a loan over the last three months, half as much as the same share over Q1, Q2 and Q3 2019, during which it remained at 10%. 18% of SMEs and 21% of MTEs have asked for a loan. Against these low levels for demands, supply rates for investment loans remained high: 85% of VSEs, 97% of SMEs, and 96% of MTEs were fully or almost fully granted their demand.
For operating needs, SMEs and MTEs can apply (usually at the beginning of the year) for credit lines giving them drawing rights over the year.
The proportion of SMEs having applied for new credit lines over the last 12 months kept decreasing and fell by 5 points to reach 31%. The same pattern occurred among MTEs, 38% of which requested new credit lines over the last 12 months. Both of these demands were largely fulfilled, with 96% of SMEs and 97% of MTEs being granted their requests. 45 % of SMEs and 50% of MTEs draw on their credit lines over the last quarter. For MTEs, this represents an increase of 7 points compared to the previous quarter. This stands out after these figures have decreased for several quarters.
2- Supply rate for equipment loans
Among investment loans, equipment loans are intended to finance intangible or tangible assets, excluding real estate.
The supply rate for equipment loans slightly rose for every type of company. Hence, 87% of VSEs were granted their loans fully or almost fully, compared to 85% in Q1-2021, whereas 92% of SMEs and 86% of MTEs have received their loans.
3- Evolution of the cost of credit
As in the previous quarters, the share of SMEs and MTEs reporting a decrease in the cost of credit was larger than that of SMEs and MTEs reporting an increase. The balance was slightly higher than during the last quarter.
Companies' expectations for banks turn down stayed on the fringe; the proportion of companies declaring self-censorship behaviors remained below the 2% threshold.
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Access to bank financing for companies
Published on Tuesday, August 3, 2021