A new cash financing solution for companies

2016 will be a year of economic transition. This is reflected in the volatility of the financial markets , weakened by the tension of the Chinese economic model and the decline in oil prices, pushing companies to be cautious. One can also perceive it on the other hand with the emergence in France of a fabric of startups disrupting one after the other parts of the whole economy, questioning the old economic models. French VSEs and SME will be affected by these new phenomena that can transform the relationship with traditional business management and require them to be agile and innovative.

In addition, some reports published in 2015 explain that French companies are underfunded compared to their English or German neighbors and often lack cash. So in this uncertain context they are showing immobility. Fortunately some solutions exist …


A recurring problem for companies: the management of the balance sheet

A recurring problem for companies: the management of the balance sheet

Business leaders are used to these three words that are the basis of day-to-day business management. The management of the bottom line, which can be summarized in the management of the cash of the company, has become in recent years a key factor for the solvency of companies. In an uncertain economic context characterized by less visibility on their development of sales and a more risky development strategy, cash is all the more key and good management of it is needed.

The Working Capital Requirement (WCR) is the overarching index on which business leaders and accountants set their financial analysis, and hence subsequently direct short-term spending choices. We will not return here to the methods of calculating this BFR which are debating, but rather on the means to improve it. Two known solutions are priorities in order to free up short-term resources and finance its needs: reduce the volume of its stocks and reduce the payment deadlines of its customers.

Some new web players are looking for solutions to improve the treasury of VSEs and SMEs, difficult mission carried by innovative startups that combine financial management and new technologies: this is called the movement of the FinTech. Alongside factoring, certain mobile applications allowing a better daily monitoring of its cash flow, integrated payment solutions, we find a new service inherited from Anglo-Saxon models: the “barter” (which can be translated literally by “barter” in French). The barter is an innovative solution for financing working capital requirements.

The use of this good old barter system makes it possible to pragmatically solve this equation: use the stocks (or unused assets) of the company as a method of payment by allowing it to find new customers on the network and, as part of the exchange, to finance in return certain current expenses of the company or investment projects.

An innovative way of trading

An innovative way of trading

It is on these two axes: better allocation of the so-called dormant assets of the company on one side and purchase without outflow of cash on the other that the Honest Credit network proposes to its members to put in relation in a collaborative logic. As a member of the France Fintech association, as well as , Honest Credit develops an innovative and effective solution to answer the financing problems of VSEs / SMEs. The Barter (or intercompany exchange) is a centralized clearing system that allows companies in the same network to finance part of their purchases without affecting their cash but directly in exchange for their production.

Launched in September 2014, Honest Credit’s web platform enables member companies to refer online, to offer their offers and to state their needs. From then on, they access an account dedicated to trading operations. A network facilitator is then in charge of facilitating and accompanying the networking with other network member companies. The credit barter will then allow them to settle, without cash out, the invoices for sales and purchases on the network. Legally, the exchanges between companies are based on an exchange of invoices (sales and purchases paid by compensation).

Reduce the volume of your stocks and remove the payment deadlines by the barter

Reduce the volume of your stocks and remove the payment deadlines by the barter

This financing solution is therefore particularly effective for the company with stocks that can exchange them as a company with a strong seasonality (hotels, restaurants, ticketing …), who can use the barter to boost sales on slow periods.


Following an exponential growth, many companies have already joined the network in just over a year and so are 400 companies members of the exchange network that can become your customers or suppliers. Indeed, the use of this barter exchange makes it easier to purchase because it limits cash outflows. A company will be able to sell a portion of its inventory that can not find a buyer in the traditional market via the network without degrading its value. By reducing inventories, the company retains the value of its products, finds new customers and releases barter credits for future expenses. A good point for bottoming out.

Regarding the payment deadlines, Honest Credit provides a radical solution by committing to credit business accounts instantaneously upon receipt of the invoice . Thus a company having sold a service on the network will be able to benefit from its credits at the end of its service. She then sends her invoice to her client by sending a copy to the platform. The invoice is the obligatory tool allowing these exchanges of goods or services between several companies. This must be written as a standard invoice but must be marked “in compensation” in order to register this regulation which expects a counterparty (even if it is not immediate). There is also the possibility of establishing monthly or quarterly payments that will extend over the duration of the contracts. To go further on billing by compensation, Honest Credit has also published a very useful article on his blog that we invite you to read: “What a bill by compensation? “

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