Business financing, simplified

Each partner sets their own eligibility criteria. So your ability to get financing for your business depends mainly on:

• your business creation date;
• how long you've had your Qonto business account;
• your country of residence;
• your turnover;
• your financial liabilities.

Other factors can work in your favour, like strong growth potential or high equity levels. Note that Qonto doesn't guarantee you'll get a loan, even if you meet the eligibility criteria. Each partner remains free to accept or reject your financing request based on your application quality.

With Qonto, your business can get what it needs, when it needs it. You can:

• manage daily expenses: protect your cash flow with immediate funding advances to finance supplier purchases;
• boost growth: fund activity peaks with funds available at the right time for stock purchases, equipment or high marketing spend;
• handle urgent expenses with peace of mind: cover payment delays, repair needs and other unexpected business expenses.

Most businesses need money to expand or develop their operations. Here are the 3 main financing methods companies can use to improve their cash flow.

1. Equity financing

Equity financing remains essential when starting a business. To cover cash flow needs at launch, partners make cash capital contributions. This step involves depositing share capital to complete company registration procedures. During the business lifecycle, activity development may require increasing equity. To meet these financing needs, several options are available to company partners:

• carry out a capital increase to make new contributions;
• provide funds via a partner current account;
• open the company's share capital to other investors.

Need to finance an investment? Local authorities can provide grants — and unlike loans, you don’t have to pay them back (as long as you meet the conditions).

2. Professional bank loans

Among different financing sources, professional credit remains one of businesses' preferred options. However, convincing banks isn't always easy for entrepreneurs. Banks want to minimize risks in case your business launch fails. So they typically require substantial personal contributions: between 10 and 50% of the credit amount.

Beyond contributions and a convincing business plan, banks demand solid guarantees on assets held by the company or partners before granting professional credit. For example:

• joint guarantee allowing banks to transfer debt to managers without having to act against the company first;
• pledging of shares or business goodwill.

3. Other external financing

Don't have sufficient financial assets and personal contributions to improve your credibility with banks? Other financing methods exist to develop your business if you face difficulties accessing bank credit.

If you want to acquire furniture or real estate equipment, leasing is an excellent alternative to finance this need. You approach specialized companies that buy these assets to lease them to you. At lease contract expiry, three options are available:

• return the asset to the company;
• renew the lease contract;
• acquire the asset at a lower price, accounting for rent paid.

Little known by SMEs in France, factoring is among the best alternatives for businesses seeking to improve cash flows. This method allows a company to sell its trade receivables to a specialized organization, called a factor. Beyond covering short-term financing needs, factoring protects you from bad debt risk. The factor handles debt collection.

Among external financing sources, crowdfunding attracts more and more French SMEs. Choosing a crowdfunding platform lets you quickly raise funds from a wide public of contributors: individual investors. More than a bank loan alternative, crowdfunding typically complements professional credit.

Does your entrepreneurial project show strong growth potential? Turn to venture capital companies or individuals experienced in financial investments: business angels.

If you're starting a business, know that you can get financing, including bank loans. However, banks will refuse to cover your financing needs if you don't have personal contributions, regardless of your business sector.

In this case, other financing sources can help you gather funds essential for launching your business:

• find partners: this task will be easier if your project shows strong growth potential;
• request honor loans from specialized organizations like France Active or ADIE (Association for the Right to Economic Initiative);
• raise funds from family and friends: this financing method is called "love money";
• launch a crowdfunding campaign to raise funds from individual investors;
• request microcredit: limited to €10,000, this solution is recommended for low-risk projects, like craft activities.

Beyond these financing methods, the State offers various aids to support business creators or buyers:

• ACRE, giving you partial social charge exemptions;
• NACRE (New Support for Business Creation or Takeover), providing access to zero-rate loans for business financing;
• ARCE, financial aid from France Travail for job seekers who are business creators or buyers. It involves receiving part of unemployment benefits as capital, allowing you to receive 60% of remaining ARE rights in two installments.

Finally, women entrepreneurs can benefit from specific financing sources when starting or buying businesses. For example:

• The "garantie ÉGALITÉ femme" guarantee covering up to 80% of bank loans, limited to €50,000;
• "Wom'energy" program offering peer-to-peer support and access to honor loans between €15,000 and €50,000 for women entrepreneurs.

Whether for creating or developing their activity, sole traders can request professional bank loans if their application is solid. Banks must ensure the micro-business is trustworthy and has stable income.

Several supporting documents may be required from individual entrepreneurs, such as:

• ID document;
• proof of address less than three months old;
• latest turnover certificate from Urssaf;
• last three bank statements;
• etc.

Similarly, personal contribution of around 20% of the total borrowed amount is often required. Banks will also require guarantees to cover loans in case of sole trader default. This could be borrower insurance or guarantee, for example.

Micro-entrepreneurs can also get professional microcredit, honor loans or use crowdfunding. 

Finally, you can also use Qonto to get business financing accessible to micro-entrepreneurs through our partners. Choose the partner that best fits your needs from the Qonto app and make your financing request. If approved, you'll receive funds in a few days, directly in your business account.

Whether following activity decline, unpaid invoices or losing an important client, businesses can quickly face financial difficulties. In this context, several financing solutions exist to help struggling companies restore healthy cash flow and make new investments.

The first solution is requesting bank credit. However, it can be difficult to get bank financing when first signs of difficulty appear. Banks are more cautious about financing businesses with overdrawn accounts.

These businesses can then use public aid. In France, several support systems exist:

• possibility of getting payment delays, debt relief or remission of tax and social debts;
• support from Codefi (Departmental Committee for Examining Business Financing Problems) for companies under 400 employees;
• support from Ciri (Interministerial Committee for Industrial Restructuring) for companies over 400 employees.

Struggling businesses can also contact Credit Mediation to get bank loans or restructure existing credit. This free service is provided by the Bank of France.

Many financial solutions exist to help young entrepreneurs get started. For example:

• honor loans from national organizations like Réseau Entreprendre, Initiative France or France Active;
• €1,000 flat-rate premium for entrepreneurs under 30 who got microcredit from Adie and meet eligibility criteria;
• Aid for Business Creators and Buyers (ACRE) for 18-25 year olds;
• entrepreneur competitions to win money, like the Pépite prize;
• regional aids for young entrepreneurs aiming to establish themselves locally.

Young entrepreneurs can also benefit from dedicated support programs and statuses, such as:

• national student-entrepreneur status;

• Young University Enterprise status;

• "1jeune 1mentor pour Entreprendre" mentoring program, implemented by Moovjee.