In 2020, in a context of tightening credit conditions and the economic and health crisis, fixed-term contracts and other “non-permanent” contracts suffered even more from the context. The proportion of those who managed to obtain a loan without this famous sesame even dropped slightly at Vousfinancer: in 2020, 87% of borrowers were on permanent contracts compared to only 1.2% on fixed-term contracts (1.3% in 2019). When there are two borrowers, the proportion of borrowers on CDD rises to 3.2%, because the main borrower is on CDI most of the time …
Only 0.2% of loans are granted to two people on fixed-term contracts. In 2021, business creators and intermittent workers will find it particularly difficult to borrow, as shown by the results of the survey carried out with Vousfinancer agencies, while solutions can be found on a case-by-case basis for those who are on short-time work.
Only 1.2% of borrowers on fixed-term contracts in 2020
In 2020, as we could foresee in the context of the tightening of the conditions for granting credit in connection with the recommendations of the HCSF, the share of borrowers on fixed-term contracts, has further declined. : at Vousfinancer, only 1.2% of borrowers were on fixed-term contracts in 2020 against 1.3% in 2019 and 1.7% in 2017. A figure far from the reality of the labor market in France since 87% of hires are made on fixed-term contracts. And even if in total alone 12% of employees in France are on fixed-term contracts, they are underrepresented among borrowers Due to two major obstacles for banks: 85% of fixed-term contracts are signed for periods of less than one month (compared to 57% in 1998), and only 1 in 5 fixed-term contracts become a permanent contract after one year compared to one in 2 in 1982 (source: France Strategy).
Easier to borrow for two, with a spouse on a permanent contract.
When there are two borrowers, the share of CDD is slightly higher among co-borrowers who benefit from the fact that they borrow with a person on CDI. So 3.2% of co-borrowers are on CDD (79% are still on CDI), a figure also down (4.90% in 2018). Loans granted to two CDDs are almost an exception, since only 0.2% of borrowers are affected!
We note that these figures change very little over time, and rather unfavorably. “Paradoxically, while rates have continued to fall in recent years, access to credit for fixed-term contracts has deteriorated, in particular over the past two years. Historically low rates do not allow the cost of risk to be covered, they ultimately penalize those who would like to borrow with an ‘extraordinary’ file … In addition, in 2020, the health crisis more affected a whole section of the economy – tourism, catering or events – very employer of fixed-term contracts, which makes this type of weakened borrower even more risky for banks. currently ” analysis Julie Bachet, Managing Director of Vousfinancer.
The specific case of CDIs with partial unemployment
Currently, it is possible to finance borrowers on short-time working, but with difficulties. According to the results of an internal survey by the Vousfinancer network, nearly 60% of the agencies succeed, under conditions and 30% only when the period of partial unemployment is over. Only 10% currently have no solution for these borrowers from their banking partners. It is possible to finance borrowers on short-time working, on a case-by-case basis, if they have professional seniority and precautionary savings, but this also depends on the sector of activity in which they work. If it is in a sector severely affected by the crisis, the bank will refuse. In addition, the banks try to detect if it is a temporary partial unemployment or if it reflects a real financial difficulty of the company..
It also varies a lot from bank to bank. Some still agree to take the full salary if the borrower has sufficient seniority, while others take into account the drop in income linked to partial unemployment. Still others ask that the borrower has not been on short-time work for at least a month when applying for credit to grant it …
“In the current economic context, banks more than ever need to have visibility on the sustainability and regularity of income that will allow the borrower to repay his loan. This is why they are very attentive to the sector of activity, but also to the employability of the borrower, that is to say his ability to quickly find a job in his branch or area of expertise. Currently, being on short-time work can be a brake for some banks because the question arises of the borrower’s future when the government’s support system ends ” completes Julie Bachet.
Among the other minority categories among borrowers, we also find TNS (non-salaried workers: self-employed, business owner, artisan traders and liberal professions) better represented than fixed-term contracts, since they have 3 years of balance sheet, with a slight rebound: 6% of borrowers are self-employed, (against 5.1% in 2019 and 6% in 2018), while retirees decreased (2% of single borrowers, against 3.3% in 2019). This increase in NER can be explained by the fact that the liberal professions – medical in particular – who do not have these difficulties in borrowing, were more numerous to do so …
Difficult to finance profiles outside permanent contracts, but not impossible!
We asked the agencies of the Vousfinancer network to get their feedback on the financing of non-permanent contracts in 2021 (study carried out from March 5 to 10, 2021 among the 185 Vousfinancer agencies)
63% of Vousfinancer brokers feel that in 2021, in the current context, banks are even more reluctant to finance “non-CDI” profiles than in recent years. 27% believe that there is no devolution and that it is as complicated as before. Only 10% find that at the start of the year, the banks agree to finance some of these profiles, subject to conditions. If it is generally considered more complicated to finance this year the profiles “other than CDI”, there are however significant differences in the status of borrowers.
According to Vousfinancer agencies, business creators (27% of responses), intermittent entertainment workers (21%) and self-entrepreneurs on par with fixed-term contracts (19%), are the most complex files to finance at present: It was already complicated to finance business creators in recent years, because the banks are asking for 3 years of balance sheet, but in the current context of economic uncertainties, in certain sectors such as events, tourism, catering, etc. are all entrepreneurs, even with a history, that we no longer manage to finance … The best in these cases is often to contact the bank that holds the professional accounts because it knows better the profile of its client and the management he makes of his accounts and will be more inclined to finance it.
We also questioned our agencies about their ability despite everything to manage to finance this type of profile. Almost half of the agencies (46%) say they have had bank refusals on these profiles (compared to 31% of respondents in 2019). Conversely, only 6% of agencies say they have succeeded in funding these profiles several times this year, compared to 10% in 2019… A little less than a third of them achieve this exceptionally, a stable figure!
“As a broker, we have identified the banks most inclined to finance certain borrower profiles ‘outside CDI’ according to their specificities. Some establishments, for example, are more specialized in intermittent entertainment, others are used to analyzing the files of entrepreneurs, which makes it easier to obtain credit for these profiles. In addition, the fact that we bring them in parallel volumes of more classic and quality files often helps us to obtain an agreement on a more complicated profile.… This is also the advantage of going through a broker ” concludes Julie bachet.
Examples of “non-cdi” borrowers recently financed
An intermittent performer, with a lot of contribution and residual savings A temporary borrower with the contribution of expenses and 3 years of seniority A CCD married with a CDI with € 60,000 in income and € 30,000 in contribution A fixed-term contract, hospital staff, with € 2,000 in income and the contribution of notary fees An entrepreneur with 5 balance sheets A self-employed entrepreneur with € 2,500 in income but a contribution of € 50,000 A self-employed person, with a spouse on a permanent contract, the contribution of costs and savings after the operation.