French Monetary and Financial Code
In forceOn the occasion of any financial assistance that it intends to grant to a sole trader for the purposes of his business, a credit institution or finance company intending to request a security interest in an asset not required for the business or a personal surety granted by a natural person must inform the entrepreneur in writing of the possibility of proposing a guarantee over the assets required for the business or requesting a guarantee from another credit institution, a finance company or an insurance company authorised to provide surety services. The credit institution or finance company will indicate the amount of the guarantee it wishes to obtain, taking into account the amount of financial assistance requested.
If the sole trader fails to respond within fifteen days or if the credit institution or finance company refuses the guarantee proposed by the sole trader, the credit institution or finance company shall inform the sole trader of the amount of the guarantees it wishes to take out on assets not required for the operation of the business or from any other guarantor. If the entrepreneur does not agree, the credit institution or finance company may refuse to grant the financial assistance without being held liable.
A credit institution or finance company that has not complied with the formalities set out in the first and second paragraphs may not, in its dealings with the sole trader, rely on any guarantees it may have given. In the case of a guarantee constituted by a real estate or movable property security giving rise to publicity, the credit institution or finance company may no longer rely on it as from the cancellation of the registration of the security.
