Illustration of an invoice.
GILE MICHEL / SIPA
The Arc cabinet published its barometer on the financial health of companies on Tuesday.
The coronavirus crisis has caused an increase in bill payment delays, which can put businesses at risk.
The Minister of the Economy, Bruno Le Maire, is in favor of the creation of a rating to identify bad payers.
Invoices that take more and more time to be paid, a cash flow that gradually dries up, until payment is suspended and closed permanently.
This is, succinctly, the dark scenario that many companies fear at the moment, with the economic crisis linked to Covid-19.
The Arc cabinet barometer, published this Tuesday, will not necessarily encourage them to be more optimistic.
According to their survey of 500 companies at the beginning of September, late payments have increased markedly in recent months, particularly affecting SMEs (small and medium-sized companies, with less than 250 employees), more fragile than large groups.
As a reminder, late payment is noted as soon as the deadline for paying the invoice is exceeded.
Conventionally, this period is 30 days after completion of the service or delivery of the goods.
Longer payment terms
According to the Arc firm, late payments for SMEs now amount to 18.6 days on average (which means that payment is made 48 days after the service is provided).
This is one week longer (7.7 days) than the previous year.
"We must take the measure of this explosion", explains Denis Le Bossé, president of the cabinet.
Because for 95% of the leaders surveyed in the barometer, "the failure to respect payment deadlines endangers the health of companies, which can go as far as filing for bankruptcy".
How to explain these delays?
For 32% of companies, this is because their customers who pay late also have overdue cash and are therefore unable to free up enough money to pay their bills.
But 24% of those polled affirm that this blocking is “deliberate”, without necessarily having a precise justification.
For example, these may be companies that have the capacity to pay but prefer to keep reserves.
EMPs to the rescue
When money runs out, companies are often forced to turn to other solutions, such as the State Guaranteed Loan (PGE), which offers very low rates (between 1% and 2.5%) , with repayment spread over a maximum of five years.
Before the summer, more than 500,000 companies had already requested it, for a total of 85 billion euros in loans.
While the device was to stop at the end of the year, the State finally decided that companies could subscribe to it until June 30, 2021. The executive is also pushing for the development of equity loans, which present the The advantage of not being recorded as debt on companies' balance sheets (even if they have to be repaid).
But that will not necessarily be enough: "Many companies still live thanks to state aid," notes Kérine Tran, legal director of the Arc cabinet.
Once the loan has been consumed, they risk filing for bankruptcy quickly ”.
To safeguard cash flow, it is therefore imperative to reduce payment delays.
In order to put pressure on bad payers, the State has for several years developed the “name and shame” by posting on the DGCCRF website companies that have been fined for not having paid their bills on time.
Since last year, they have also been obliged to publish the sanction in the local press at their own expense.
Towards a specific rating agency?
But the business leaders surveyed are calling for stronger measures, in particular the creation of a "rating agency for payment terms".
Built on the model of classic rating agencies (such as Moody's or Standard & Poor's) which assess the risk of non-repayment, it would assign a public rating to each company, depending on its speed in paying its bills on time.
“This would improve transparency, Judge Kérine Tran, because solvent companies may very well not meet payment deadlines”.
This proposal received the support of Bruno Le Maire.
Invited to react to the results of the barometer, the Minister of the Economy says he is "in favor of this rating (...) which allows SMEs and subcontractors to be informed, and can be rewarding for a company that makes the effort to pay right in time ".
However, the minister explains that this proposal will see the light of day "when the [economic] period will be a little quieter".
This, in view of the epidemic situation, still leaves many months to recalcitrant companies or in difficulty to improve their deadlines.
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