Rise in number of French businesses failing

Some 64,427 businesses will fail in France in 2024, compared to 56,965 in 2023, according to recent estimates.

By size of business, Groupe BPCE, which owns the Banque Populaire and Crédit d'Épargne retail bank networks, says 44,592 firms with between one and three workers will fail, compared to 14,486 with between three and nine employees, and 5,349 with 10 or more workers.

While it is the larger firms that often attract French media attention, smaller businesses account for more of the 44,000 jobs that are likely to go by the year end, says Groupe BPCE.

Over the years the importance of small and very small businesses has filtered through to policy makers in Paris.

There is now official government advice on what to do here. An English version is found by clicking on the language choices box, on the right side of the screen.

Number one on the list is to have tax and social security contributions delayed.

There is a Commission des chefs des services financiers (CCSF) in every department, which can coordinate this; very small businesses (defined by the government as having fewer than 10 workers and under €2million in turnover or total assets) can make a simplified request to set things in motion.

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How can the CCSF help businesses?

Using the CCSF helps with administration as only one reduced payment on delayed payments is made. The CCSF distributes it to the various tax and social services bodies concerned.

There is a 20-month limit on the time these contributions can be put off.

Government help can also be obtained for firms with fewer than 400 employees from organisations called Comité départemental d’examen des problèmes de financement des entreprises (CODEFI).

Set up in each prefecture, and so under direct state and not local government direction, the aim of the CODEFI is to mobilise all the state departments “to guide and inform businesses in difficulty in all sectors”.

It can pay for an external audit of a business to diagnose the problem, look for sources of finance to turn around or restructure a business, and unlock state loans from fonds de développement économique et social (FDES).

The final solution proposed on the government site is aimed at businesses having difficulty obtaining a bank loan or struggling to repay loans.

It is better to act early when this happens, and contact the Médiation du crédit aux entreprises. This is part of Banque de France, and the service is free, including for micro-entrepreneurs. 

Once a file has been submitted and accepted by the service, it contacts the banks concerned with all the weight of the Banque de France behind it and asks them to review their position in five days. Sometimes it works.

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Cessation de paiement

Once again, it is important to act early and before cessation de paiement (stopping paying debts).

Banks and local Chambre de Commerce et d’Industrie (CCI), might also have help in place for businesses in difficulty.

Banks in particular often use help as a selling point when trying to get people to open business accounts.

But ask around for recommendations – in Angouleme in the Charente department some years back the president of the CCI was involved in a scandal and prosecuted for profiting from the failure of businesses by buying up assets cheap and selling them on.

He and an auctioneer, who was also convicted, had close links with the local Tribunal de Commerce, one of the few courts where elected volunteer judges sit, with the requirement being that they are heads of businesses. Usually the judges are also close to the CCIs.

And there have been cases where firms have gone to seek help from banks, only to find their accounts were immediately blocked.

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