French small businesses face rising fragility and record failure rates

A recent study by AGS in partnership with Ipsos bva reveals that 50% of leaders of very small enterprises (TPE) in France consider their businesses to be in a period of fragility or difficulty. Among those surveyed, 19% described their situation as critical. The primary indicators of distress cited by these leaders include declining turnover (51%), cash flow tensions (34%), and late payments from clients (29%).

Despite high levels of business creation—with 1.23 million new companies registered over the last twelve months—France is experiencing a record wave of business failures. Data shows 70,803 failures over the past year, exceeding pre-pandemic averages. This occurs despite significant access to credit, with 93% of SMEs obtaining requested investment loans.

Entrepreneur Marvin Ndiaye suggests the issue is not a lack of financing, but rather human and organizational challenges. He argues that while capital is available, the high mortality rate of businesses—often occurring around the third year of existence—points to a need for better leadership and support rather than just public aid or fundraising.