Companies, especially at the start of their activity, often need external funds, from their partners or third parties (banks, etc.). Indeed, the cash generated by the activity does not always allow financing needs to be met, particularly due to investments made. There are many ways to finance your company (capital contribution, current account contribution, loan, inter-company loan, etc.)
Contribution to the current account by the partners
This is the simplest way to bring money into your company . Thus, no capital increase is required (therefore it is not necessary to call an extraordinary meeting ) and the contributor can recover the funds made available to the company at any time. In addition, the contribution can be remunerated by interest. In return, it is not possible, through this means, to increase one’s share in the company’s capital. Thus, in multi-person companies, the partners who favor capital increases will increase their decision-making power in the company compared to the partners who will simply inject money into the current account.
Capital contribution increases cash flow
Subscribing to the initial capital or capital increases of a company has many advantages:
the contribution allows you to be granted political rights (voting rights) or financial rights (ability to receive dividends),
a capital gain may be recorded in the event of transfer of the securities received in return for the subscription,
This allows, if certain conditions are met, to benefit from a reduction in income tax of 18% or ISF of 50%,
The company’s credibility is strengthened with greater social capital.
However, capital contributions are subject to very restrictive formalities (obligation to convene an extraordinary general meeting, need to obtain the agreement of the partners, etc.) and the majority partners may oppose them. In addition, it is very difficult for the contributor to obtain reimbursement of his funds. The sums are therefore blocked.
Bank loan
This is the most natural way to benefit from a cash injection. However, banks have become quite cautious when it comes to financing businesses. Thus, it will be necessary to carry out a particularly credible project and have significant equity.
Inter-company credit
The Macron law authorized intercompany loans . Thus, a company, as of January 1, 2016, can borrow from another company with which it has no capital link. However, these loans are subject to very strict conditions:
the loan is reserved for very small, small and medium-sized enterprises (VSEs),
the lending company must be an SA or an SARL and have excess cash .
In fact, it is appropriate to wait for the publication of a decree in order to have more details on the terms of application of the system (definition of the economic link, maximum applicable interest rate, etc.).
The public investment bank (or BPI) offers financing solutions to support certain projects such as the development of innovation, the conquest of new markets, the takeover of establishments, etc. These solutions can take the form of:
Companies wishing to benefit from the solutions offered by the Public Investment Bank must contact a local branch or make a request on the institution’s website.
Crowdfunding, or participatory financing, is booming at the moment. There are many sites that allow Internet users to invest in a project in just a few clicks.
The amounts paid may or may not have a counterpart (share in future profits, free provision of the product or service offered, etc.).
