• Public Financing Programs: The French Chronicles
  • June 5, 2014
  • Law Firm: Phillips Nizer LLP - New York Office
  • I recently read an article by a French export consultant taking the position that smaller French companies seeking to introduce their products to foreign markets should never finance their efforts with their own money, as there are so many public funds available in France to cover the costs. The author expressed surprise at the feeble percentage of available public financing for export that was actually used. Because of France’s dominant position in the fashion world, often such funding is easier to obtain for new designers than it is for makers of more esoteric products.

    It is true that the French government offers plenty of “gifts” to encourage young companies to make a serious effort to expand the demand for their products by exploring overseas markets. As an American, I am quite surprised by the number of such offers that are available at all levels in France: national, regional, communal, chambers of commerce, etc. It is impossible for the tiny management structures within smaller companies to know about the vast number and diversity of such public financing programs.

    It follows that a major reason for the limited use of public funding available for export is ignorance of the existence of so many tools. If one must search in order to find them, I doubt that the managers of many smaller companies will devote time to the effort when they face so many other pressing priorities.

    Fortunately, the supply meets the demand, and there are consulting firms that have arisen able to identify financing that best corresponds to their clients’ projects. Funds are often available according to the product, and many consultants specialize in particular industries. The fashion business is one that is targeted for public financial support, so it should be worthwhile to seek out consultants dedicated to apparel and accessories. However, these firms are often tiny, so very few of them advertise sufficiently to be easily found.

    I have determined, on the basis of the business practices of French companies with which I have worked, another possible explanation for the failure to use public funds available to support efforts to export by companies of modest size. This explanation has its particularly French aspect. According to consultants who specialize in this niche, many such programs are available to a company only once. What is a normal reaction in France but incomprehensible to an American is that a manager will come up with so many questions concerning which of his or her export proposals is the right one — as if they have already identified any alternatives — he or she will decide not to pursue the original project so as not to favor it over a potentially better one that might be submitted at a later time. This manager will never make a single sale abroad!