Resources Database

Our Resources Database was launched so we could keep you up-to-date on the latest French news in an easily accessible and searchable way.

The resource database has main sections covering French Mortgage Guides, French Property Guides, French Mortgage Glossary and Living In France.

Within the resources database you’ll find pages devoted to a wide range of topics including consumer protection, consumer advice, practical advice and information on buying property in France and the Eurozone countries along with topical, often light-hearted, news items that may otherwise have passed you by.

For a more serious regular update on the Eurozone economy and the financial markets with a special focus on the evolving conditions of the market in our more strategic monthly Market Trends is the place to go. The Market Trends update is more strategic, focussing on the financial and political news from the Eurozone to bring you the medium term picture of where we think the market is going and the economics and fundamentals driving it.

Our Market Overview page is written to keep you up to date on the latest thinking on the factors driving the market in the longer term and has a focus on long term investment, macro economic trends and the evolving framework determining the operation of the Eurozone financial markets and in particular the French mortgage market.

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Index of Resources Database

French Property Purchase Cooling Off Period

The French property purchase cooling off period is a great benefit to French property buyers and must expire before the purchase deposit needs to be paid.

In England it is the practice not to enter into a binding contract until you or your solicitor is satisfied about searches and enquiries, any survey and any necessary mortgage offer.

In France, where practice is closer to Scottish law, it is usual to enter into the compromise de vente, which will immediately bind the parties to the transaction, at a much earlier stage. However, due to high pressure estate agent sales tactics a cooling off period was introduced for buyers allowing them to withdraw from the contract and change their minds within a fixed short period. The legislation was introduced in June 2001 as a result of the Loi SRU dated 13 December 2000.

The law allows a non-professional purchaser to withdraw from the contract even though both parties have signed it. This cooling off period will last for a fixed period of seven days which will start the day after the formal signed compromis de vente has been received by the purchaser.

Since the law came into force, Article L271-1 of the Code of Construction and Housing has provided that a copy of the initial contract must be delivered to the purchaser by registered letter with acknowledgment of receipt or any other equivalent means for the determination of the date of receipt of delivery. In practice there are two ways to notify the contract: either by registered post or by hand delivery.

It is common practice for the estate agent who prepares the initial contract to send a copy of it to the purchaser by registered post (lettre recommandeé avec accuse de réception). The purchaser will then benefit from the cooling-off period of seven days which starts the day after receiving the notification. However, we have seen notifications sent to the purchaser even before they have signed the contract and agents asking the purchaser to sign the receipt confirming the start of the cooling-off period. This procedure does not comply with the law and is illegal as it is clearly stated that the cooling-off can only start the day after the purchaser receives the contract signed by both parties.

It is very important for a Notaire in charge of a file to ensure that the notification was properly sent to the purchaser in order to avoid any argument regarding the application of the cooling-off period and when it expires. The risk for a vendor would be that he would find himself in a position where the cooling-off notice was incorrectly sent to his purchasers and that they request a new notification is sent in order to have the possibility of withdrawing before completion.

The second way of notifying a contract is to deliver a copy of it by hand. Giving a copy of the contract to clients and asking them to sign the certificate confirming that they received it was more the practice followed by Notaires, as public officers.

This practice gives the authenticity that the client received a copy of the contract and the starting date for the cooling-off period. The recent decree dated 19 December 2008 has amended the conditions for a Notaire or even an estate agent to give the notification by hand. The first requirement is likely to bring to an end the practice developed by the Notaire of the certificate of hand delivery which is signed by the purchaser and then attached to the Deed of Sale to certify that the procedure for the cooling-off period was followed.

Now it is a copy of the Sale Agreement, whether it is notarial form or a private agreement, which will be delivered to the purchaser.

The contract must set out the provision of Article L271-2 of the Code of Construction and Housing. This is not new and practitioners were already putting a copy of this text on the certificate delivered by hand to the purchaser. However, the innovation is that the beneficiary of the cooling-off period must write a sentence on the contract confirming the receipt of a copy of the contract.

The contents of the handwriting is strictly defined by the text. It requires further that the buyers specify the name of the professional who assisted him with the signing of the contract whether it is the estate agent or the Notaire and the place and date where the contract was signed.

As far as the deposit is concerned, the initial contract that they signed stipulates that the deposit of 10% will have to be paid to the Notaire. In practice an estate agent or Notaire would like the purchasers to pay the deposit when they sign the contract to give the security to the vendor that they are serious clients. However, it is not unusual to have a clause in the contract stipulating that the deposit will have to be paid within two to three days after the expiry of the cooling off period. It could be a condition of the contract that will enable the vendor to withdraw if the deposit was not paid.

The deposit is a sum that will be lodged with the estate agent or Notaire in the client account. It will not generate any interest for the purchasers should they decide or be obliged to withdraw before completing.

The deposit will represent a proportion of the price if completion takes place. However, should the buyer decide to withdraw for any reason it is likely that this sum will be allocated to the seller’s estate agent to cover their lost commission as part of the sum due under the penalty clause. The deposit cannot be transferred immediately to the seller and in practice the seller will have to follow a procedure to establish the buyer’s failure to complete and the right to claim the deposit as compensation.

Best French Mortgage have noticed a small but increasing number of instances per year where estate agents have been very reluctant to return purchase deposits when the buyer has withdrawn at the end of the cooling off period or under a French mortgage clause suspensive. We recommend that buyers insist that the deposit is lodged with and held by the Notaire not the estate agent.

French Planning Permission

French Planning Permission rules are set out in the “Code de l’Urbanisme”.

How French planning permission can affect French property renovation

To put this into context let’s give you two examples of how the planning system can affect French property renovation. We decided that we would like to add two Velux windows to our roof. We were told by the contractor that they could not start without planning permission having been granted. We called into see our local maire, explained what we wanted to do and he nodded and said the magic words “pas de problème”. On our next visit a few weeks later there was a note in the door from the maire saying permission had been granted.

By comparison about four years ago our neighbours, a local French family, decided to convert an atelier into a home for one of their sons and just started work. The maire refused retrospective planning permission but the son moved in with his family anyway. Both parties are now locked into an expensive legal appeal process which has recently reached the Paris court of appeal.

Certificat d’Urbanisme – (Outline Planning Consent)

The most important type of certificate is the “Certificat d’Urbanisme” (CDU), which states whether the owner has the right, or not, to build on specific land and gives details about the taxation of the land and buildings. You should not try to obtain a French property renovation mortgage unless you are sure you have a “Certificat d’Urbanisme” (CU).

There are two kinds of certificat d’urbanisme:

  • certificat de simple information (certificate of information), information on the existing rights of the property and
  • certificat opérationnel (operational certificate), which shows you whether or not a specific development can be undertaken.

Once your house has been built, or if you buy an existing property, the need for further planning consents depends on the type of renovation.

Failure to obtain planning permission where it is needed can result in the demolition of renovation work, even of the whole building, and a financial penalty. The local maire has some degree of discretion here, so for small building works permission can be granted retrospectively provided the maire does not feel that there was a deliberate attempt to circumvent the planning system. With French property renovation work it is quite easy to complete a project without realising that planning permission was required. It can save you considerable inconvenience if you are on good terms with your local maire and you ask his advice before you start.

French Property Renovations that do not require consent

Renovations or improvements which take place inside the property, such as the installation of an en-suite bathroom, do not generally require planning consent.

Déclaration de Travaux: (Declaration of Building Works not Requiring Planning Permission)

Small improvements, which don’t alter the use of the building, only require a déclaration de travaux. This would include improvements such as adding internal walls, skylights, replacement windows and doors, installation of outbuildings such as garden sheds, greenhouses, conservatories, and additions of less than 20sq m floor space. Open-air swimming pools are also covered by a déclaration de travaux.

The paperwork is available from the Mairie, the waiting period for approval is about a month and the notice must be displayed for at least two months, (and during the whole construction period if longer than 2 months) with the note “absence d’opposition” (no disagreement).

French Property Renovations that require French Planning Permission

Large Renovation Projects

For any French property renovation project to renovate or construct a building over 170sq m Surface Hors Oeuvre Net (SHON), net habitable space, the law states that an application for a Permis de Construire cannot be investigated unless an architect registered under Architectes des Bâtiment du France has “established the architectural project”. This means that the architect has to draw up plans and make the planning application on your behalf.

Calculation of the relevant SHON must include all habitable areas and measurements must include the thickness of the walls, which must therefore be measured to the outside face. The calculation normally excludes open areas at ground level such as a porch, balconies, basements, garages and any habitable area where the headroom is less than 1.8m, such as rooms under the eaves.

Each French département’s Direction Départementale de l’Equipment (DDE) has a consulting architect (architecte conseil) who will provide advice on the type of building permit required, and confirm if a project constitutes more than 170sq m SHON and therefore requires the services of an architect. This service is free of charge, available by appointment, and is invaluable if you are planning a large scale French property renovation project.

The technical dossier which the architect has to produce must contain a written submission explaining the visual impact of the project, as well as site plans (scale 1:5000 or 1:10000 for the land and scale 1:500 for the property), floor, section and elevation plans (scale 1:100), photographs of the existing site and an elevation of the proposed improvements.

Permis de Construire – (Planning Permission)

The Permis de Construire is the main instrument of planning control. A permis is required for any change to a property that will alter its valeur cadastrale (taxable value). The Mairie can grant full or conditional permission. A letter of notification will be sent following submission with the application number. Details of the application will be displayed at the Mairie. A tacit approval may be assumed two months from the date of submission and the Permis de Construire will normally be delivered within three.

Work should start within two years after permission is granted. A 12-month extension is available; the request must be sent at least 2 months before the expiration date of the original planning permission.

Amendments to the original design after approval of the Permis de Construire require a Permis de Construire Modificatif. It is imperative that the work that is undertaken complies with the work described in the Permis de Construire or the Permis de Construire Modificatif.

There is no planning application fee in France, but the tax foncière payable on the property will be affected by any development.

When renovation work starts, a Déclaration d’Ouverture de Chantier (declaration that the work has commenced) must be lodged. The Permis de Construire has to be displayed on a panonceau (panel) at the entrance to the site so that third parties can object if you have failed to take their interests into account in the application. The authorities have the right to inspect the works to ascertain conformity with the terms of the Permis de Construire.

Once the renovations are complete, a Déclaration d’Achèvement des Travaux (declaration that the work has ended) must be completed within 30 days. The authorities will send a certificat de conformité within 3 months.

It is an offence to undertake renovation work without a Permis de Construire if one is required. This can result in a fine or in certain circumstances an order for the building to be returned to its original state prior to the unauthorised building work.

Any works carried out on the “Monuments Historiques” (historic building) require planning permission.

It is also an offence to carry out work outside that which is defined. If you had a Permis de Construire to convert a barn into a house and then decided to convert it into gîtes it would be necessary to submit a demande de Permis de Construire Modificatif or even a new Demande de Permis de Construire.

Permis de Démolir – (Permission to Demolish)

A demolition permit may be required to demolish a building, however dilapidated; this varies by French commune. A “demande de permit d’autorisation de coupe ou d’abattage d’arbres” may also be required to lop or cut down trees.

Some examples of renovations that would require French planning permission

Change of use of a building.

Creation of additional accommodation.

Construction of an outbuilding exceeding 20sq m.

Installation of a swimming pool of over 20sq m.

Installation of a septic tank.

Some examples of renovations that may require French planning permission

Removal of rendering to expose external stone work.

Covering stone work with rendering.

Creation of a terrace or patio over 60cm high or covering more than 20sq m.

Installation of security grilles.

Conditions Suspensive

In French property purchase Conditions Suspensive can be used for inserting specific conditions in the compromis de vente contract for the sale/purchase of French property.

Sellers do not often use conditions, because they only need to find a happy buyer. But as far as buyers are concerned, the situation is different; they are more cautious and will want further clauses to be put in the contract before contracting with the other party.

Such conditions are called conditions suspensives and will be discussed at the stage of signing the compromis de vente.

French law provides for some standard legal conditions suspensives to protect the purchaser, but special clauses can be added to the contract if they are agreed between the parties.

Conditions suspensives will need to be met before the contract can be fulfilled and completion will be postponed until each condition is fulfilled. If a condition cannot be fulfilled, the party will generally be free to withdraw from the contract and will not be bound by any obligation or indemnity.

This article does not cover all the conditions suspensives that exist, but will analyse the three most widely encountered circumstances:

  • Obtaining a French mortgage
  • The sale of a property by a buyer before buying
  • The legal condition in the contract (grouped as one condition).

Obtaining a French Mortgage

The law dated 13 July 1979 provides some protection for a purchaser who wants to raise a mortgage in order to purchase the property. The rules are set out in the Consumers Act, which sets out that the buyer will be able to withdraw from the contract if the bank refuses to finance the transaction.

The buyer is allowed to pull out and recover any deposit paid.

To prevent any seller being in a weak position, full details of the mortgage sought should be indicated in the clause with the amount to be borrowed, the names of the banks to be contacted, the interest rate excluding or including insurance and the duration of the mortgage.

If the buyer obtains a mortgage corresponding to the conditions set out in the contract, then it will be considered that the condition is fulfilled and completion will be able to take place (Court Case 9 December 1992).

What happens if the insurance company that should guarantee the repayment refuses to insure the borrower?

As far as the insurance is concerned, it is not compulsory for a buyer/borrower to have it but we know in practice that banks will not release any funds if the mortgage is not covered by insurance.

Before the law dated 1 July 2010, bank customers were obliged to take out insurance with their affiliated insurance company but since then the buyer has been able to provide different insurance from any company providing that it covers the same risk.

Suppose the bank has agreed a mortgage with the borrower but the insurance company will not agree to cover the borrower for whatever reason. In that case shall we consider that the condition is still fulfilled and that the purchaser has an obligation to complete or will he be able to withdraw because the insurance has not been accepted?

From the seller’s point of view, he may consider that the contract stipulated the obtaining of a mortgage that has been agreed by a bank and therefore he will probably wish to compel the purchaser to complete whether or not he has the funds. As far as the buyer is concerned, he will consider that the condition is not fulfilled because the bank will not release the funds and the mortgage cannot be fully granted to him.

To avoid this difficulty, my view is that a clause in the contract should also be inserted to protect the buyer in case no insurance company will agree to guarantee the repayment of the mortgage.

Can a seller claim the deposit as an indemnity if the condition to obtain a mortgage is not fulfilled by the purchaser’s default?

As far as the buyer’s fault is concerned, the condition about obtaining a mortgage in the contract will always stipulate that the buyer should lodge an application within a fixed period and that the mortgage should be approved by the bank within 30 – 60 days. Then the buyer should inform the Notaire of the failure or acceptance of the mortgage within a fixed period which could be between three and eight days.

The question will be whether or not the seller will be able to request the payment of the penalty clause if the buyer has not been able to provide him with confirmation granting the mortgage within the timescale stipulated by the contract.

A court case precedent has indicated that the seller should ask the buyer in writing by registered post whether or not his mortgage application has been accepted. Without this formality, the court decided that the seller would not be able to claim the payment of the penalty clause as an indemnity.

Condition Potestative

‘Potestative’ is a word rarely heard in any article or book as it is not often used in this context in a contract. The condition potestative is a condition that will rely on an event or act that should be carried out by the buyer such as the sale of his property before buying another one.

The condition can be purement or simplemenent potestative. The condition purement potestative allows the buyer to decide whether or not to do the things that will satisfy the condition such as selling his existing property. The condition simplemenent potestative, on the other hand, will also depend on an external fact that will have to be fulfilled before, in the event of a dispute this is what the court would usually say applies.

A basic example is the sale of a property by a buyer before completing the purchase of another one. It is not rare in practice that a buyer will need to raise funds to purchase a property from the sale of an existing property that he has. Sellers are always reluctant to put such a clause in the contract because they could face an indefinite delay. If the clause regarding the sale of the property by the purchaser is not clearly set out there could be a delay of several months and the seller will have to wait for the sale of the other property.

It is for this reason that, to be valid in the contract, the condition should stipulate a deadline for selling the property with the description of it. The buyer should also show goodwill by putting the property on the market.

If a potential buyer mentions to an estate agent his wish to sell an existing property to finance the purchase of the property on which he has made an offer, the estate agent has an obligation to advise his clients of the possible insertion of this clause in the contract. It was decided by the court in 1999 that an estate agent who failed to advise his client about this and had to pay damages to the purchaser who was obliged to complete the sale.

Legal Conditions Suspensives

The final condition will regroup three main conditions that are always inserted in a binding contract. They are the legal conditions suspensives. The first condition will be the non-existence of any charge or debt that could be revealed before completion.

For instance, if the seller fails to reveal existing debts he has and that the creditors took a charge over the property, the Notaire who will complete the transaction will obtain from the Land Registry, and probably the local authorities, notification of the outstanding amount owed to them. Should the debt exceed the selling price, the purchaser can withdraw from the contract otherwise he could become involved with a special procedure with the creditor.

The second legal condition will be the non pre-emption from the local authorities. In France the mayor of a commune or the agricultural administration (SAFER) can decide to purchase a property from the seller and evict the buyer if the property is situated in a rural area. It will be the Notaire’s responsibility to send a notification to the Mairie or the SAFER that will then have a period of two months to reply and say whether or not they wish to pre-empt.

Finally the third condition relates to the property itself. During the local searches by the Notaire the result will have to show any constraint, private or legal easement that may affect directly the use of the property. It is the Notaire’s responsibility to request a town planning certificate, which will reveal if there is any restriction, constraint or easement that may alter the direct use of the property.

It is important to remember that selling or purchasing a property can be subject to some conditions suspensives but some of them will have to be agreed between the parties and each side will have to assess the risk of inserting such conditions in the contract.

Dossier Diagnostic Technique

The French dossier diagnostic technique is a mandatory requirement and the French government require that a number of diagnostics, equivalent to the short-lived UK Home Information Pack (HIPS) scheme, are carried out as part of the French property transaction.

All French property sellers are required to have a dossier diagnostic technique prepared before a compromis de vente can be signed. The results of the dossier diagnostic technique are included in the compromis de vente and subsequent acte de vente. As a prospective buyer you are entitled to know what the dossier diagnostic technique reveals and should study it before applying for a French Property Mortgage.

Dossier Diagnostic Technique | Is It Useful

French dossier diagnostic technique is a comprehensive review of a property that is for sale and it is required by law to be prepared before the property is sold.

As a general rule, if you are considering purchasing a French property, you should ask to see the full dossier diagnostic technique.

The dossier diagnostic technique report can be useful in alerting you to specific problems.

The dossier diagnostic technique does not report on the consequences of any problems disclosed, how the problems could be resolved, or what the material condition of the property is. It will be useful to an artisan preparing an estimate to rectify any identified problems.

It can be very difficult to interpret the contents of the dossier diagnostic technique report and they are best assessed on site if that is possible.

Although assessment may be difficult, the information in the dossier diagnostic technique could be very important and ignoring any of the reported issues could cost you a lot of money.

Always ask the seller for a copy of the dossier diagnostic technique and do not make a purchase offer before you fully understand what the possible consequences and costs of remedying what is reported.

Though it is not usual in France to have a property surveyed before purchase, if there are any issues reported in the dossier diagnostic technique that you don’t understand, or which you understand enough to fear will be expensive to correct, you should take further advice.

Dossier Diagnostic Technique | Contents

DPE (Diagnostic de Performance Energétique)

The DPE (Diagnostic de Performance Energétique) has been compulsory for all sales of French property since November 2006.

Dossier Diagnostic Technique

The DPE rates energy use per square metre of floor area, and environmental impact based on CO2 emissions. If you think it looks familiar you’re right, because it’s the same chart you see on fridges and freezers: B-C-D are good ratings and G-H are weak ratings and A is virtually unachievable for a conventionally built house.

The DPE must be completed before an estate agent can advertise a property for sale, is currently valid for ten years and it should be available to all viewers. Many Estate Agents now include this part of the complete DDT on their website but if not you should request a copy of the complete dossier diagnostic technique before negotiating a price for the property.

The DPE is the same format for all properties and will always be included in the dossier diagnostic technique.

Diagnostic Assainissement

Approximately 5 million properties in France are not connected to mains drainage and since 2011 all properties using fosse septique drainage must be inspected.

The diagnostic assainissement non collectif reports on whether or not the the septic tank conforms to current legislation: most do not. A non-conforming septic tank must be brought into conformity by the purchaser within one year, this usually involves replacement.

The diagnostic assainissement inspection certificate is valid for one year.

Diagnostic Amiante Parties Privatives

Since 2002, every transaction on every French property for which building permission was granted before July 1997 must have an asbestos inspection certificate.

Asbestos was commonly used in French construction from 1950 to 1980, for its sound and heat insulation and fire protection qualities.

The most likely places to find asbestos are wall insulation, chimney linings, false ceilings, and roofs, (including corrugated roofs).

Asbestos is now prohibited, due to its carcinogenic nature, but there is no requirement for it to be removed from non-residential outbuildings.

If no asbestos is present the certificate valid indefinitely.

Constat du Risque d’Exposition au Plomb

Sometimes described as “lutte contre la saturnisme” the test is compulsory on all sales of French houses constructed or renovated before 1949.

Paint containing lead was normal up to 1950 and the most likely places to find lead are in doors and window frames.

In rural areas it was also common to paint walls up to one metre with led based paint to reduce damp.

The inspector will pass a radio-active wand over any damaged paint looking for lead up to 1 mg/cm2.

Presently, only painted surfaces are affected and water pipes are not tested for lead.

The certificate is valid for one year.

Constat d’Etat Parasitaire – Termites

This test must be carried out for all property sales within the defined termite risk zones.

Three types of damage to wood are looked for: termites, woodworm and dry rot.

If damage is found, the owner is responsible for treatment.

The certificate is valid for six months.

Diagnostic Gaz

This has been obligatory since November 2007 for all properties offered for sale with natural (mains) gas services installed more than 15 years ago.

Gas installations (pipes, boiler, water heater and radiators) will be graded as absence of danger, minor risk or grave and immediate danger.

If the surveyor finds the gas installation is dangerous, Gaz de France must be informed immediately.

Although bottled gas is not subject to this test, gas installations such as central heating fuelled from propane tanks will be examined.

The certificate is valid for three years.

Diagnostic Electrique

This was introduced in January 2009 and affects every property with an electrical installation over 15 years old.

It broadly covers:

  • General circuit condition.
  • Overload protection and fusing.
  • Current differential switch fitted and working.
  • Appropriate protection and electrical isolation of equipment in potentially dangerous areas such as bathrooms.

The certificate is valid for three years.

Etat des Risques Naturels et Technologiques

This has been obligatory since June 2006.

The report identifies the likelihood of earthquake or other natural hazards such as flooding or subsidence and includes a list of previous occurrences.

The necessary documents are available from the Mairie, the Préfecture and the DDE.

The certificate is valid for six months.

Mesurage de la superficie privative: Loi Carrez

Confirmation of surface area is required for all dwellings within a copropriété, such as an apartment block or a Résidence.

Since 1997 the seller of such a French property has been responsible for supplying the declaration.

The buyer is entitled to a reduction in the price proportional to the difference if the surface area is proved to be 5% less than declared.

The surface “Carrez” is not simply the floor surface area, because of the treatment of entrances, landings, balconies and sloping ceilings so most sellers commission an official report.

If you are buying a French property such as a flat or studio you should ask to see the Loi Carrez report.

If you are selling a French property, your Estate Agent can advise you whether the law applies.

Détecteur de fumée

From March 2015 every French property must be fitted with a smoke alarm certified to CE14604.

French Business Finance

Understanding French business finance isn’t difficult, but it does require thinking through what you can and can’t reasonably borrow for your business from a banker’s point of view.French Business Finance

In general terms, lenders will be concerned to establish three things:

  1. That you will be able to afford the repayments.
  2. That the income from which you will be repaying the mortgage is secure.
  3. That you will be putting a reasonable amount of equity into the business to match the borrowed funds.

How to Win French Business Finance

The key characteristics of a bankable French business finance proposition are:

  • Proprietary know-how that creates a barrier to entry for others.
  • The potential for scalability to global markets.
  • A business model generating significant recurring revenues.
  • A CEO and management team which includes industry-relevant senior executive(s)
  • A compelling USP such as possession of robust intellectual property.
  • A unique or compelling location, site or asset.
  • A business that competes more on value provided to customers than price.
  • The possibility of growth via acquisitions and/or corporate investment.
  • A business strategy that will attract trade buyers and investors in the public equity markets.

You may not have all of the above in place, but the more items on the list you can tick the better your chances will be of getting business finance.

A useful source of further information is the Invest In France website.

FAQ

 It is possible to arrange 100 % business finance?

100%  is possible but truly exceptional as, post the dotcom bubble, most funding sources learnt that the risk of 100% financing was too high. If all you have is a business idea and a business plan, however good you believe it to be, then you will almost certainly be unable to raise 100% financing. However if you can tick off some of the  items on the Key Business Characteristics list above and if a tangible value can be put on them then you might be surprised how much finance you would be able to raise.

Does the business need to have enough income to make finance interest payments?

Not necessarily. Most French business finance providers will be more interested in making a capital gain on their investment than on earning interest. If you have the right proposition you may not need to make any repayment of finance for up to 4 years.

What if I’m self-employed?

If you are self-employed you will need to move the business into a fundable structure such as a limited company.

Are euro interest rates expensive?

They have typically been around 2 % below comparable UK rates since the Euro was launched and tend to behave in a similar way to the old German Bundesbank rates. The actual interest rate you pay will be a standard Euribor rate plus a lending margin and will depend on the type of business finance you take. Because French business finance sources are generally more interested in capital gains than interest receipts the tough negotiation will not be about interest rates but about ownership structure.

Can I finance property and building work?

Yes, this is seldom a problem. If the business is well established there is sometimes the possibility of a French Business Mortgage on terms equivalent to a residential mortgage. However, if the essence of your business is a property, such as a hotel, then you will need to be able to prove that you will be able to meet all interest payments, operating expenses and capital repayments.

What about fees and other charges?

It is impossible to generalise as to the size of fees and other charges because there is such a wide variation in business profiles and circumstances. In general term any fees for advisors, such as lawyers and accountants, will need to be paid as incurred whereas the fees and charges for French business finance will fall due after the funds have been contractually offered and may not need to be paid until some years later.

For a free no-nonsense discussion as to how our French Business Startup Finance services can help you build a more successful new or expanded business call us on +44 (0)20 7193 7843 or +44 (0)7948 308 868

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