Cash Difficulties: Cash Loans

In case of difficulty of cash, know that there are different credits of cash.


This is a short-term credit which allows the debit function of the bank account, generally granted without warranty claim.

The differences between the cash facility and the bank overdraft are slim.

While the overdraft corresponds to an authorization (oral or written) whose amount and maturity are clearly determined, the cash facility refers more to an unconditional point tolerance.

The cash facility and the overdraft facility are often reserved for organizations with a sound financial structure and to meet one-off or limited cash requirements (generally less than one month’s turnover).

The absence of a guarantee encourages banks to be particularly cautious. Most of them wish to observe the operation of their client’s account for some time before considering such a contest.

The ease of checkout is flexible and widespread.

The bank authorizes the company to return its debit account “a few days a month” according to the formula. Why only a few days? Payment of suppliers is usually made on fixed dates. The same applies to wages and social contributions.

For their part, trade accounts receivable are cashed in on the water and in any case not on the same dates.

By requesting that the account be periodically credited, the bank ensures that the financial structure of your company is sufficient, ie working capital (equity + long and medium-term debt) covers the needs working capital related to the operating cycle (inventories + trade receivables – trade and social debts).

In simple terms, the cash flow resulting from this difference between working capital and working capital need not be permanently negative.

The discovery :

As the name suggests, the account is indebted for several weeks, even several months without interruption.

The bank turn indicator changes from orange to red. This is a sign of a deterioration in cash flow, the causes of which must be determined. The situation has become tricky especially when it is spotted by the banker and undiagnosed before by yourself within the company.

Favorable case to get an overdraft:

When an unusual inflow of funds is expected to occur on a specific date (such as an exceptional customer receivable or transfer of a material), the bank will not hesitate to assist you, provided that you inform an authorized excess overdraft.

Content of the file to be presented to the banker

Whether the need for cash is very punctual or more frequent, the banker will first solicit a detailed cash flow forecast.

The study of demand will also involve an analysis of the accounts for the last two financial years and the estimated budget for the current financial year and possibly the next.

Legal documents: up-to-date statutes, composition of the board, identity documents for directors …

Banker’s assessment criteria

Analysis of your financial structure, your operating cycle and the nature of your financial needs.

Your management skills and your transparency.

Faced with a demand for short-term credit, the banker will appreciate being solicited before the need arises and will be particularly sensitive to the quality of the cash flow forecast.


It is a discovery of several months, which finances the seasonal activities.

While the seasonality of the cash facility is monthly, that of the campaign credit is annual.

The most concrete example is the manufacturer of chocolates or decorations of Christmas trees; it pays its purchases, wages and other expenses throughout the year while the bulk of sales are made in the last quarter. The bank finances discrepancies.

The risk of the banker is in this case much more important than for a conventional cash facility. If your sales are below your forecast, your profitability will deteriorate and you will have trouble repaying the credit for lack of sufficient revenue.

To study the file, the bank requires a formal cash flow plan with sales, purchases and other monthly payments indicating the dates of collection and disbursement.

The cost of these credits:

the interest rate: it is indexed most often on a monetary rate (and no longer on the bank base rate TBB) + margin to be negotiated with each bank.

The highest commission: applied to the strongest debit balance of the month.