It is quite hard to obtain a revolving loan or an overdraft facility in France to offset periods where working capital needs are high for your business established in France.
Thus managing your cash flow genuinely is strongly advised.
You should keep in mind that in France social charges and taxes must be paid on time, or you will be required to pay a 10 per cent penalty for a late payment by your French startup or SME. Getting customers to pay on time may also be challenging, though the law is regularly getting more stringent in order to encourage prompt payment of bills.
You can eventually charge a late payment fee and most vendors put a warning to this effect on their bills.
You may also get factoring loans or buy receivables insurance from French banks, where you pay a premium each month or quarter based on the evaluation of the ‘riskiness’ of your business – usually calculated as the balance outstanding for each of your customers and the assessment of the individual and overall risk of not being paid.
