What Are the New Measures for SME Credit?

Until now, more than half of SMEs had abandoned their credit applications because of banks’ reluctance to grant financing on reasonable terms. With the new framework, the situation is expected to evolve: banks will be legally required to explain in more detail why a credit request is refused and to explore all realistic solutions before closing the door on an application.

These measures are based on a simple observation: SMEs form a vital economic “lung” and a key source of employment. Rather than imposing purely restrictive obligations, the reform mainly encourages banks to improve the information they provide to clients, to increase transparency and to examine each request more carefully before taking a final decision. In case of refusal, the financial institution will have to justify its position through a clear, structured and understandable explanation.

This new level of transparency should allow SMEs and independent workers to better prepare their credit files. Thanks to more in‑depth risk analysis and explicit feedback, entrepreneurs who are turned down will be able to identify the weak points of their profile, strengthen their guarantees or adjust their project, then submit a new, more robust application with a higher chance of acceptance.

The Opinion of the UCM

The Union des Classes Moyennes (UCM) has openly welcomed this evolution, which should gradually lift the persistent uncertainty weighing on the SME credit market. For the UCM, these measures are not excessive demands from companies and independents, but rather a necessary rebalancing in view of the amounts typically involved in their financing needs.

In practice, the loans sought are often modest compared with large corporate financing: under 100,000 euros for most independent workers and around 200,000 euros for many SMEs. These are amounts that are essential to finance working capital, modernize equipment or support growth, but that until now could still be difficult to obtain because of strict prudential policies and sometimes limited dialogue between banks and entrepreneurs.

By clarifying expectations and making the criteria for granting credit more transparent, the new rules can help restore confidence. SMEs will better understand what banks look for in a well‑constructed file, while financial institutions will have a framework that encourages them to communicate more proactively with their clients.

Another key aspect of the reform concerns prepayment penalties, which will now have to be assessed in a way that eliminates any grey areas. For credit amounts below 1 million euros, penalties related to early repayment will be capped at a maximum of six months of interest. This limit provides SMEs with greater predictability and protects them from excessive costs if they wish to repay their loan ahead of schedule.

For loans exceeding 1 million euros, banks and SMEs will be encouraged to negotiate together and agree on a rational, transparent calculation method within three months. If no agreement is reached within this period, the government reserves the right to step in and impose a method. This pressure mechanism aims to avoid endless discussions and to ensure that both parties quickly find a fair solution.

Even with these improvements, it is important to understand that banks will not fundamentally change their prudential policy. A solid, well‑documented and realistic credit file remains the best guarantee of acceptance. The new measures provide more clarity and protection, but they do not replace sound financial planning, clear business projections and a coherent repayment strategy from the entrepreneur.