For company directors, it can be a dreaded deadline. Every year, after the publication of its financial statements, the Banque de France carries out a little exercise comparable to that carried out by rating agencies for governments or major groups. It assesses companies' financial health and assigns them a rating, in the form of a "credit rating" and an "activity rating," proportional to sales.

This exercise, which has been carried out for 40 years by the financial institution and its network of some 1,000 analysts throughout France, only applies to companies domiciled in France with sales in excess of €750,000. This represents some 300,000 companies rated each year.

This system, whose workings are relatively unknown to business owners, can nevertheless have a major impact on the future of their business. "For banks, the Banque de France rating is the starting point for analysis, the first key to calculating risk," said Germain Simoneau, chairman of the Confédération des Petites et Moyennes Entreprises. "It has a much-awaited impact, as it conditions access to financing. The better the rating, the more money the bank can lend. On the other hand, when you have a poor rating, you have to make do with the financing they are willing to give you," he said.

This rating is not made public: It is only accessible to a handful of players, but these are companies' key partners such as banks, insurers, mutual insurers, credit insurers and participative financing platforms, as well as certain authorities involved in preventing company difficulties.

'The problem is temporality'

When a company's rating is poor, or downgraded from the previous year, the consequences are soon felt. "Credit insurers and suppliers can go so far as to cancel a company's outstanding debt," said Denis Le Bossé, president of ARC, a firm specializing in debt collection. "I have an example of a company selling electrical equipment to electricians. One of its suppliers granted it an outstanding balance of €40,000. Due to an outstanding payment, the company had its credit insurance suspended, and the supplier reduced the outstanding amount to €5,000."

In sectors such as construction or industry, where it can take several months between the purchase of materials or raw materials and payment by customers, this consequence is extremely penalizing. "This situation can be a serious issue for small businesses that don't have the internal resources – accountants, financial directors – to plead their case with bankers or insurers," said Le Bossé.

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