- Category: Shareholders
Current accounts for your business associates
To fund a French company, you’ve got 3 options available to you:
- Increasing the “social capital” of your company
- Taking out a loan
- And current account contributions
What is a current account contribution?
A current account contribution refers to one of the associates essentially lending money to the company.
If you want to know more about exactly how that works: What exactly are current accounts in France?
Why is it helpful?
Current account contributions are one of the best ways to give your company cash on the short-term. Normally, associates can get their money back whenever they want, but it is possible to “block” this account. This means that the associate will only be able to get reimbursed after a certain amount of time. This offers a few additional advantages:
- It can serve as a guarantee for banks or investors, as they know the company will have this money for a certain amount of time
- It allows the company to boost its cash for a pre-defined amount of time, without having to go through the paperwork of boosting your social capital
- The associate can view this as an investment, especially if the money is paid back with additional interest