Bank credit up again for businesses

According to the latest data from the Banque de France, outstanding business loans are up year-on-year. In October, they rose by 8.6%, following a 7.9% increase in September. Recourse to bank credit is on the increase, particularly among large companies, which last year favored market financing.

Outstanding loans: 19.9% annual growth rate for large companies

Despite rising interest rates, companies are increasingly turning to bank credit for financing. Outstanding loans are increasing for all categories of company, as recent Banque de France data reveal, although the increase is even more marked for large companies.

Over the year, the annual growth rate of outstanding loans increased by :

  • 5.7% for small and medium-sized enterprises (SMEs),
  • 6.6% for mid-sized companies,
  • and 19.9% for large companies.

However, the cost of bank loans rose by 32 basis points in October: on average, companies borrowed at a rate of 2.50% in October, compared with 2.18% in September.

Bank credit, less expensive than market financing

If the trend is even more pronounced for large companies, it's because in 2021 they turned to the markets for financing. But the cost of market financing has risen, and the gap with bank credit has widened, from 171 basis points in August to 228 in September.

Although this gap narrowed in October (189 basis points), bank credit remains a less expensive financing solution for companies than the markets, with an average rate of 2.50% for credit versus 4.39% for market financing.

Companies turned mainly to cash credit (+11.1%) and equipment credit (+10.5%). Cash loans have enabled them to rebuild their inventories, which they hope will be sufficient to cope with any new supply difficulties.

However, while companies are increasingly turning to bank credit, access to this financing solution could become more complicated. In a report published at the end of October, the French High Committee for Financial Stability (HCSF) predicts " a risk of tighter financing conditions " for companies in the medium term.