Business loans are the lifeblood of the global economic arena. Without them, most of the companies that produce the products and services that populations consume would never have gotten off the ground. Business loans provide the oxygen that entrepreneurs must have to turn their thoughts, ambitions and innovations into a reality which benefits us all.
In this article, we turn the spotlight on France, Poland, and Lithuania, the entrepreneurial activity within each country and the availability of different kinds of business loans to which entrepreneurs have access.
What is an Entrepreneur?
An entrepreneur is someone prepared to take the risk of starting a new business venture. They form companies in order to realise their ideas, raising capital and employing people in the process. They take an active role within the business and accept the financial risk that accompanies any new project.
Entrepreneurs are one of the most important driving forces for both national and global economies alike. They bring innovation into the business arena and create wealth, not only for themselves but for other businesses like the loan companies that finance them.
Let’s now take a look at the commercial loan options available to entrepreneurs, starting with France.
France and Prêts Professionnels (Business Loans)
After a period of stabilisation from 2021 to 2023, the number of annual startups initiated by entrepreneurs in France is once again on the increase. In 2023, the new startup total was 1% down on the previous year. It’s bounced right back up there in 2024. The biggest sub-sector increase was sole proprietorships, which came in at plus 7%.
Whether it’s a new company startup or a new venture within an existing company, if you are an entrepreneur who needs a loan to finance a new scheme, here’s what you need to consider:
- Defining the purpose of a loan. You’ll need to advise the potential lender whether you need the loan for startup purposes, for equipment, expansion, raw materials or stock, , or for bridging the cash flow of the business.
- The amount of the loan and the term. It will be tailored to your business and the duration can be long or short term.
- Interest rates. The interest that will be applied can be fixed or variable. This will be influenced by your business’s creditworthiness, the state of the economy, and the policies the potential lender follows.
- Secured or unsecured. If the loan is for a large sum and your business has no track record, some form of collateral may be required.
Advice on Business Loans for Foreign Entrepreneurs
One of the most important prerequisites in France when applying for a business loan is having a comprehensive business plan. This applies to both native and foreign entrepreneurs. You also need to ensure that you are familiar with French business culture. Being au fait with local business etiquette, the norms and regulations, can make all of the difference to the success of your application.
It’s also a good idea to work with a local French financial consultant. They can help to steer you through the intricacies of French banking.
Business Loans for Startups – Prêt Création d’Entreprise (PCE)
PCEs from €2,000 to €7,000 are available from OSEO who offer a guarantee of 70% on your business loan. However, a PCE only works for an overall investment value of up to €45,000, but the OSEO can provide guarantees for larger investments.
Female entrepreneurs can request a guarantee from the Fonds de Garantie à l’Initiaitve des Femmes (FGIF). This national fund, managed by France Active, will generate a guarantee of 70% on business loans up to 38,000 euros.
As well as business loans from traditional lenders, the French alternative Finance market is trending. In 2024, it drove a revenue of USD 189.2 million, and is predicted to reach USD 736.5 million by the year 2030.
Poland
Amidst the evolution of the financial systems in Poland, new technologies are arriving that offer tailored solutions for business loans. The main loan sources currently available include:
- The Polish banking network. Responsible for the lion’s share of the loan market. They offer larger loans to companies that have a high level of solvency. However, more recently, the Polish banking network has introduced loan options for SMEs
- The second largest portion of the lion’s share goes to finance companies and private lenders who offer their services through alternative finance platforms. These digital platforms offer entrepreneurs a much faster and easier loan application process.
- Alternative crowdfunding platforms. These platforms offer numerous investors the opportunity to examine your company profile to decide whether or not to invest. This, too, is a relatively rapid process, normally providing you with results by the end of the second day following the application.
Poland has a vibrant startup and SME culture that promises to look even brighter following an announcement between the European Investment Bank (EIB), the European Investment Fund (EIF), Santander Bank Polska, and Santander Leasing. They’ve signed an agreement which will result in injecting PLN 5 billion for Polish SMEs.
Lithuania – Business Loan Options for Entrepreneurs
As of the end of December 2024, based on information from the Bank of England, there were 13 Central Bank of Lithuania-approved commercial banks operating in Lithuania. In addition, there were six foreign banks. These banks can be approached for:
- Credit Loans: Flexible finance for companies to use to address liquidity challenges.
- Investment loans: Ideal for long-term projects, including things like purchasing real estate or upgrading infrastructures.
- Lease loans:Offering a cost-effective solution for acquiring essentially needed equipment and spreading launch upfront payments across longer terms.
- Working capital loans: Perfect for dealing with short-term financial requirements such as raw material and stock purchases, but also helpful for funding operational expenses.
Embank (European Merchant Bank) and others also offer ILTE (formerly Invega) guarantees. These guarantees are backed by a Lithuanian government agency with the idea of reducing risk for lenders, thus enabling SMEs to obtain loans that might not otherwise be possible. Such guarantees can provide lenders with an 80% safety net.
Another option is the European Investment Fund (EIF), which provides risk finance for the benefit of SMEs across Europe. The shareholders of EIF comprise the European investment bank, the European Union, and a diverse range of public and private banks and financial entities. PayRay is an alternative finance company that works with EIF to provide Lithuanian SMEs with attractive business loan terms.
One alternative lending platform in particular, Finbee, offers entrepreneurs up to 95% financial compensation on business loan interest paid.