Banks continue to lend to businesses for the time being

Political uncertainties in France and Europe are not yet weighing on business financing, according to several surveys that have just been published.

The Banque de France and Bpifrance published reports on the eve of the weekend. One could say: let’s wait and see in the coming weeks whether this trend will continue. In reality, the wait-and-see attitude has been going on for over a month now but has not changed anything in the attitude of the banks, which continue to lend to businesses.

In May, bank financing of private companies increased by almost 2% over one month. According to the Banque de France, growth accelerated particularly in SMEs, with a particularly marked dynamic in investment credits which increased by 3.5%. But this is not what all companies say. Some complain that they do not find banks attentive enough to them.

The real obstacle is the cost of credit. Interest rates have fallen a little, but they remain high. And, it is true, many small business owners are refused loans. Either their cash flow is still too fragile, or their development plan is not sufficiently solid. But, overall, Bpifrance states that “access to financing remains flexible.”

Can we really measure the impact of political uncertainties on business financing in the coming weeks or months? If there is to be a wait-and-see attitude, it will come first and foremost from businesses. Nothing could be more normal: in the current context, a responsible boss is not going to embark on major investments. And then there are public finances.

In a report published on Monday 15 July, the Court of Auditors once again sounds the alarm and estimates the savings needed in the short term at 24 billion euros. In an interview with Echoes On Monday morning, the First President of the Court, Pierre Moscovici, stressed that “Reducing the debt is neither right nor left, it is in the general interest”.

The risk is that political uncertainty will slow down demand across the entire chain, and therefore overall activity. Several key points need to be observed very closely, including consumer confidence in the evolution of their purchasing power and the housing issue, especially among young people and the most modest households.