Simply, the difference between them is the source of the repayment funds and the risk the bank would be taking by granting you a business mortgage. This is especially true if you are trying to raise Business Startup Finance.
Because the bank is being asked to take a risk on the ability of your business to generate continuing profits to cover the mortgage repayments, the eligibility criteria are very strict.
The eligibility criteria for other French mortgages are less strict as you only need to show that you can repay your mortgage (at least initially) from income that is generated from sources other than the property on which your mortgage is secured.
French Business Mortgage Qualification
If you need finance for a project which will be the source of income for the repayments, then French home and business mortgages are not the answer and you should be looking for commercial finance.
You will need to make a very strong case that the business will be viable in your hands and will also need to meet the criteria explained on our Business Mortgages page.
At a minimum you will need to produce the following in support of your application:
- Concise executive summary of the project.
- Description of the business and how it will operate.
- Introduction to the management team and job profiles for any staff to be hired.
- Detailed and realistic marketing and sales plan to demonstrate the business viability.
- Competitive analysis against any businesses in the same addressable market or locality competing for the same customers.
- Detailed and realistic 5 year projection of revenue and expenses (Year 1 by month, year 2 by quarter, years 3, 4 & 5 in summary).
- 5 year profit and loss projection
- 2 year cash flow forecast
- Basic source and application of funds statement
- Detailed project plan showing the project milestones.
- Proof that all planning permissions and commercial agreements can be put in place as a pre-condition of funding.
- 5 years historic statutory accounts demonstrating the businesses’ performance unless it is a new business.
You may find it helpful to review the information provided by Invest in France.
French Business Finance
French Business finance broadly comes in four forms:
- Business Mortgage
- Commercial Lending
- Venture Funding
We suggest you think hard about your funding needs before choosing which French business finance route to follow.
Perhaps surprisingly, it is often be harder to obtain a French business mortgage for small projects than for large ones. A number of our lenders set their minimum mortgage level at €2 million up to a maximum of around €200 million.
We have an excellent network of contacts in the French business finance sector. We will be delighted to help if your proposition is truly commercial and you can prove it to be “bankable”.