SMEs: What is the status of a bond loan via crowdlending?

Regulated at the end of 2014 in France, the activity of participatory financing in the form of loans or crowdlending is authorized to platforms with IFP status, regulated by the ACPR, offering loans from individuals to companies; as well as platforms with CIP status, such as Raizers, approved by the AMF, offering bond loans.

As seen in our previous article " Bonds 1 - Loan 0 ", the bond loan brings much more flexibility than the traditional bank loan; among other things a greater freedom in the determination of the modalities of repayment of the capital or payment of the interests.

However, this form of borrowing is not available to all companies. Originally, bond issues were reserved for joint stock companies, then they were gradually extended to Economic Interest Groups (EIGs) as well as to associations and limited liability companies.

Bonds may be issued in the following circumstances:

- SAS with less than 2 years of existence, provided that it has its balance sheet (assets/liabilities) audited by a contribution auditor,
- SAS of more than 2 years, with balance sheets regularly approved by the shareholders,
- SARL (limited liability company) of more than 3 years, with balance sheets regularly approved by the shareholders, required to appoint an auditor; i.e. which meets at least one of the following 3 criteria: more than 50 employees, a balance sheet of more than 1.55 million euros and/or a turnover of more than 3.1 million euros,
- Association that has been carrying out an effective economic activity for at least two years.

Finally, note that only the board of directors, the management board or the manager of the LLC have the authority to authorize a bond issue, unless the articles of incorporation provide that the decision is to be made by the general meeting.