Financing international development

International deployment must be planned for in the medium term in order to bear  fruit, even though a third of first-time exporters abandon exporting after one year (source: Bpifrance).
The success of an internationalisation project requires an investment of time and a budget of expenses that are often relatively high (prospecting or implementation expenses, recruitment, adaptation of products and services, etc.) with a return on investment that can take a long time to arise.
Commercial contracts with foreign markets can also lead to a significant increase in working capital requirements.
For these different reasons, a company that decides to develop or accelerate its export activity must be able to gather the necessary financial resources adapted to its project.


Executives of companies that have successfully penetrated a foreign market mostly agree on the need to support long-term prospecting efforts. This generally involves persistent presence in the target country, or even the recruitment of local sales representatives, in order to understand the expectations of foreign clients as well as the particular competitive environment or local regulations (often leading to
investments to adapt to the offers available on this new market). This upstream work is also decisive in deciding how to penetrate the targeted market: export or establishment, or even acquisition of a local company or partnership. The development method decided upon may also involve specific expenses, sometimes not insignificant (recruitment of a V.I.E (Volunteer for International Experience), or the creation of a subsidiary, for example). Many of these expenses are intangible in nature and, therefore, cannot generally be financed by conventional banking solutions.

To save time and avoid pitfalls, many companies now use Crédit Agricole Group's specialised service providers, such as Altios International* or Business France*, to build a truly strategic international development plan.
One of the main assets of a structured approach is the construction of a medium-term business plan that will enable the bank to understand and cover the company's financing needs. This is therefore a good time to involve your banking partner in its development.

With regard to the significant expenses to be incurred, self-financing can appear to be a major obstacle to the internationalisation of SMEs and midmarket companies alike. It therefore makes sense to use external financing solutions over the medium term, and primarily bank financing, insofar as the bank is involved in the company's strategic thinking.

There are currently several bank financing formulas in France that are specific to international development and access to which is facilitated by the public aid system:

  • The bank loan associated with the Bpifrance International Growth Loan: based on a 1:1 principle, where the bank co-finances the company's internationalisation expenses, whatever their nature, with Bpifrance for a minimum period of 5 years. This is a particularly flexible formula, with a high ceiling (€10 million in total) but which, unlike following financing, does not benefit from coverage against the risk of commercial failure.
  • Bank loans partially covered by Bpifrance's International Project Guarantees: this is a bank financing plan allowing French companies to provide a subsidiary abroad with the necessary equity capital for its development. When the subsidiary is located in countries deemed to be at risk, it may be useful to add a Bpifrance Export Insurance Political Risk Guarantee (maximum 50%).
  • Prospecting Insurance: the principle of Bpifrance Export Insurance's prospecting insurance consists in covering up to 65% of the prospecting expenses incurred by the company, an amount that will be reimbursed by the company only if it actually develops its export turnover across the guaranteed geographical area. Prospecting insurance allows you to obtain a financial advance calculated on the insured expenses budget.

Crédit Agricole Group's international trade specialists (in Crédit Agricole's Regional Banks, at LCL, or at Crédit Agricole CIB), in conjunction with your corporate account manager, will be able to advise you on the financing formula best suited to your needs.


It is rare for an exporter prospecting a new market to be able to impose conditions on it. It is often necessary to adapt to competitors' offers and to offer particular payment terms. Thus, for countries where access to medium-term financing is very limited or too costly, it may make perfect sense, in order to win a contract, to offer the buyer a payment period
covering the duration of the return on investment at an attractive interest rate. However, an exporting SME does not necessarily have the financial capacity to take on such a payment term and the risk of non-payment.
In this case the solution will go through Export Credit:

  • Export Credit: this financing technique, whether it is supplier or buyer credit, in Euro or in another major currency, makes it possible to provide medium- to long-term financing to the buyer. The risk of non-payment must be covered by an insurance contract (generally up to 85%). The bank then advises the exporter on the feasibility and set-up of the operation, it being understood that this technique applies to export contracts pertaining to significant amounts (for example, from €3 million).

However, there are other alternative techniques for lower-value contracts, such as documentary credit discounting (which can last for several years). In any case, it is in the exporter's interest to submit his/her draft export contract to a bank's international trade specialist, who can then offer him/her the most suitable credit formula.

On the other hand, to give confidence to the future international client, the bank can provide bank guarantees:

  • Bank guarantees: when the exporter does not yet have a presence or history in the country, or when the commercial contract provides for a down payment and, more generally, to participate in a tender, it is usual for the exporter to provide one or more bank guarantees (bid guarantee, advance payment guarantee, performance guarantee, etc.) to the buyer.

Finally, it is also necessary to anticipate, with the bank, the cash flow requirements related to any new export contract:

  • Pre-export financing: in the context of an export contract requiring a significant working capital requirement for the manufacture of goods, the bank can set up "export pre-financing" to cover these cash requirements. Access to this type of financing can be facilitated for SMEs and midmarket companies through the Bpifrance Assurance Export guarantee.

As can easily be seen, international development projects generate multiple financial needs which a company must be able to anticipate as well as possible, through a structured approach (business plan) as well as with the support of international trade specialists and those of the Crédit Agricole group in particular.
The latter will be able to offer the company financing resources adapted to the very specific nature of an internationalisation programme, including, where necessary, use of the public system. There are many solutions available to enable an SME or midmarket company to take on a truly international dimension. It is our ambition to provide you with the means to do so by participating alongside you in the development of your project.

*Altios International: a partner of Crédit Agricole since 2007, Altios International is the leading French private international support group. The company provides its services dedicated to SMEs and midmarket company clients of Crédit Agricole's Regional Banks and LCL.

*Business France: the public agency Business France is in charge of exports and foreign investments. The Crédit Agricole Group signed a partnership agreement with Business France in 2016.


Jean-Luc Estrade,
Partnerships Manager - CACIB/ International Business Solutions Department

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