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France Épargne Corporate

Inventory financing for mid-sized companies

France Épargne Corporate connects companies seeking to finance €20m or more with the private debt funds whose ticket size, instruments and sectors match their case. Since 1 January 2022, a pledge over inventory falls under the pledge of tangible movable property in the French Civil Code.

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Short-term credit to companies in 2026

€292.4bn
outstanding short-term loans to non-financial corporations at the end of August 2026 (−0.2% year on year)
9%
of mid-sized companies requested short-term credit in the second quarter of 2026 (5% in the first quarter)
93%
of the mid-sized companies that applied obtained all of this credit or more than 75% in the second quarter of 2026

Structures

Inventory financing structures

  1. Non-possessory pledge

    The inventory stays with the company. Registration of the pledge makes it enforceable against third parties. Unless agreed otherwise, the company sells fungible inventory and replaces it with an equivalent quantity.

  2. Possessory pledge

    The company hands the inventory, or the document of title that represents it such as a bill of lading, to the creditor or to an agreed third party.

  3. ABL facility

    An advance calculated on the value of eligible inventory and receivables.

    Calculate the borrowing base

  4. Seasonal credit

    Short-term credit of 9 months or more that finances a seasonal activity. The bank grants it on the basis of a monthly cash flow plan.

Market

Pledge rules and access to short-term credit

The pledge of inventory since 1 January 2022
Legal textRule
Civil Code, article 2333The pledge covers a tangible movable asset or a set of tangible movable assets, present or future.
Civil Code, article 2337The pledge becomes enforceable against third parties through registration or through dispossession of the pledgor.
Civil Code, article 2342Unless agreed otherwise, the grantor of a non-possessory pledge over fungible goods sells them on condition of replacing them with the same quantity of equivalent goods.
Civil Code, article 2348A clause agreed between the parties transfers ownership of the pledged asset to the creditor in the event of default. An expert sets its value on the date of the transfer.
Commercial Code, articles L527-1 to L527-9The inventory pledge specific to the Commercial Code has been repealed since 1 January 2022.

Reform introduced by Ordinance no. 2021-1192 of 15 September 2021.

Demand for and approval of short-term cash loans in 2026
IndicatorMid-caps, second quarterMid-caps, first quarterSMEs, second quarterSMEs, first quarter
Short-term cash loan applications9%5%6%6%
Obtained in full or above 75%93%80%83%82%

Share of companies surveyed. SMEs: 10 to 249 employees. Mid-caps: 250 to 4,999 employees.

Questions

Frequently asked questions

What did the 2022 reform of the inventory pledge change?
Ordinance No. 2021-1192 of 15 September 2021 repealed, as of 1 January 2022, Articles L527-1 to L527-9 of the French Commercial Code, which governed the inventory pledge. A pledge over inventory created since that date falls under the pledge of tangible movable property in Articles 2333 et seq. of the French Civil Code.
Can the company sell the inventory it has pledged?
Yes, for fungible goods pledged without dispossession. Unless agreed otherwise, the pledgor sells them and must replace them with the same quantity of equivalent goods.
How does an inventory pledge become enforceable against third parties?
The pledge becomes enforceable against third parties through its registration or through the transfer of possession from the pledgor to the creditor or to an agreed third party. Once the pledge is registered, a buyer of the inventory loses the benefit of the rule that, for movable property, possession is equivalent to title.
Does the lender become the owner of the inventory on default?
It does if the parties agreed so when the pledge was created or later. In the absence of an official quoted price, an expert sets the value of the inventory on the day of the transfer. The creditor pays the pledgor the part of this value that exceeds the secured debt.
From what amount can a company request an introduction?
France Épargne Corporate introduces to private debt funds the companies whose financing need reaches €20m or more.

Contact

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Sources