French usury rate 2026: thresholds for business loans

Many business owners believe the French usury rate (taux d'usure) caps the cost of every bank loan, including those taken out by their company. For most business financing, that is not accurate: on the business side, the cap only applies to one specific category of credit, the account overdraft. Here are the thresholds applicable in the fourth quarter of 2026, who is actually protected, and how to check the effective cost of your financing.

Quick answer. From 1 October 2026, the usury threshold for account overdrafts granted to operating companies and to sole traders acting for their business needs is 19.08%, based on an average effective rate of 14.31% (notice of 25 September 2026, Journal officiel of 26 September 2026). For these borrowers, only the overdraft is capped: amortising business loans are not subject to any usury threshold.

This article covers the usury cap as it applies to business credit. The cost of short-term financing (factoring, Dailly assignment of receivables, revenue-based financing) is compared in our article on short-term financing options (factoring, Dailly, RBF), and preparing a loan application in our guide to what banks look for in a business loan in 2026.

The usury rate applicable from 1 October to 31 December 2026 to business account overdrafts is 19.08%. This threshold appears in the notice (avis) of 25 September 2026 on the application of articles L. 314-6 of the Consumer Code and L. 313-5-1 of the Monetary and Financial Code concerning usury, published in the Journal officiel (JORF) no. 0225 of 26 September 2026, under the heading "Loans granted to individuals acting for their professional needs and to legal entities carrying on an industrial, commercial, craft, agricultural or non-commercial professional activity".

That heading contains a single line: account overdrafts. It directly reflects the limited scope of usury for business borrowers.

The threshold therefore rises by 8 basis points from one quarter to the next. The Q3 threshold comes from the table posted online by the Banque de France on 29 June 2026. The thresholds for the first quarter of 2027 will be published at the end of December 2026, applying from 1 January 2027.

Our view#

A 19.08% cap is not a negotiating target: it is the limit beyond which an overdraft becomes usurious. A properly negotiated business overdraft should normally sit well below it. If the effective rate on your overdraft is getting close to this threshold, the issue is no longer legal but financial: your company is probably funding a long-term need with a tool designed for short-term timing gaps.

No, not to amortising loans: for an operating business, the usury rate only covers account overdrafts. Two provisions work together. Article L314-9 of the French Consumer Code excludes the general usury rules (articles L314-6 to L314-8 of that code) for loans granted to an individual acting for their professional needs or to a legal entity carrying on an industrial, commercial, craft, agricultural or non-commercial professional activity. Article L313-5-1 of the Monetary and Financial Code then reinstates usury, for those same borrowers, for account overdrafts only.

For these overdrafts, article L313-5-1 treats as usurious any contractual loan granted at an effective global rate (TEG, taux effectif global) which, when granted, exceeds by more than one third the average effective rate charged during the previous quarter by credit institutions and financing companies for transactions of the same nature carrying similar risks.

A five-year equipment loan to a SAS (a French simplified joint-stock company), an amortising working capital loan to a SARL (a French limited liability company) or a business loan to a craftsman trading as a sole trader are therefore outside the cap. Their cost is freely negotiated with the bank, subject to the transparency rules on the effective global rate.

In practice#

For an amortising business loan, your protection is not the usury rate but competition between banks, a careful reading of the offer (rate, fees, guarantees, insurance) and the quality of your application. A solid forecast and clear ratios carry more weight on the rate you obtain than any regulatory cap.

The scope of usury depends on both the type of borrower and the type of credit. The table below summarises the most common situations for a business owner.

Two points deserve attention. First, how an SCI (société civile immobilière, a French property-holding company) is classified depends on what it actually does: a civil company carrying on a commercial activity does not necessarily fall under the heading for legal entities with no activity, and this must be checked case by case. Second, a business owner who borrows personally to fund their company (capital contribution, shareholder current account) remains a private individual for usury purposes if the loan is taken out for personal needs: the line is drawn in the loan offer.

A property-holding SCI that carries on no industrial, commercial, craft, agricultural or non-commercial professional activity remains protected by usury on all its credit, with its own thresholds. The notice of 25 September 2026 sets the following thresholds for this heading from 1 October 2026.

For an SCI borrowing over 15 years at a fixed rate to acquire the company's premises, the effective global rate in the offer, including fees and any required insurance, therefore cannot exceed 5.93% if the loan is granted in the fourth quarter of 2026. The structuring trade-offs of this type of transaction are set out in our analysis of SCI borrowing and the leverage effect.

Points to watch#

For an SCI, usury can become a real issue again once guarantee fees and borrower insurance are added to the nominal rate: it is the effective global rate that is compared with the threshold, not the headline rate. Have the TEG calculated in the offer before signing, especially on a long loan secured by a mortgage or a paid guarantee.

The usury thresholds equal the average effective rate charged by credit institutions during the previous quarter, increased by one third. In other words, threshold = average effective rate × 4/3: in the fourth quarter of 2026, 14.31% × 4/3 does indeed give 19.08%.

The mechanism works in three stages:

1. The Banque de France collects from credit institutions the effective rates charged on each credit category during the past quarter.
2. It calculates an average effective rate per category, then increases it by one third to obtain the usury threshold.
3. The thresholds are published by notice in the Journal officiel at the end of the quarter and apply to credit granted from the first day of the following quarter: 1 January, 1 April, 1 July and 1 October.

The reference threshold is the one in force when the credit is granted. For an overdraft, whose effective cost varies with the level and duration of the debit balance, the check is made for each period of use, based on the account statements (arrêtés de compte).

Do not confuse these thresholds with the reference rate used for the tax deductibility of interest on shareholder current accounts, which is based on average effective rates for variable-rate business loans and is not a usury threshold: see our article on the deductible rate for shareholder current accounts.

The cost to compare with the usury threshold is the effective global rate, which includes not only interest but also the fees, commissions and charges linked to granting the credit. For a business, the term is TEG; TAEG (the annual percentage rate) is the concept used for consumer credit.

Here is the approach we recommend for a business overdraft:

1. Gather the account statements and bank statements for the period under review.
2. Note the nominal rate on the authorised overdraft, and the rate applied to unauthorised excesses.
3. List all overdraft-related commissions: commitment fee, commission on the highest debit balance, arrangement fees, excess fees.
4. Note the effective global rate shown by the bank on the account statement, where it is stated.
5. Compare this TEG with the threshold for business overdrafts for the quarter concerned: 19.00% until 30 September 2026, 19.08% from 1 October 2026.
6. If there is a discrepancy or inconsistency, ask the bank in writing for the calculation details before taking any legal action.

For an amortising business loan, the exercise is different: the usury threshold does not apply, but the effective global rate must be stated. Ordinance no. 2019-740 of 17 July 2019 unified the penalty for a missing or incorrect TEG: the lender may lose its right to interest in the proportion set by the judge, having regard in particular to the loss suffered by the borrower.

The underestimated risk#

On an overdraft, the headline nominal rate is rarely the problem. It is the commissions calculated on the highest debit balance and the excess fees that drive up the effective cost. A company living on a structural overdraft often pays more for its short-term financing than it would for an amortising loan or an assignment of receivables, without having measured it.

When a business overdraft exceeds the usury threshold, the excess charges are automatically set off against normal interest, and then against the principal of the debt, under article L313-5-2 of the Monetary and Financial Code. If the debt has been repaid in full, principal and interest, the sums unduly received must be refunded with statutory interest from the day they were paid.

Two practical consequences follow:

• the excess is demonstrated by a figure-based reconstruction of the effective rate, period by period, from the account statements;
• the challenge itself is a matter for a lawyer; the chartered accountant contributes by reconstructing the flows and quantifying the amounts.

The overdraft is the only business financing covered by usury, but it is neither the cheapest nor the safest. The bank can reduce or terminate it, subject to notice, which makes it a fragile support for a permanent need.

Before applying for financing, also check the debt capacity ratios banks look at: they determine the answer and the price far more than the regulatory cap.

In practice#

An overdraft used permanently is a sign of a poorly financed working capital need. Rather than monitoring the usury threshold quarter after quarter, it is more effective to build a 13-week cash flow forecast and size suitable financing with the bank.

• Each company credit line is classified: overdraft (within the scope of usury) or amortising loan (out of scope).
• The applicable threshold is recorded by quarter: 19.00% until 30 September 2026, 19.08% from 1 October 2026 for business overdrafts.
• Account statements are reviewed to identify commissions and excess fees.
• The TEG of each amortising loan appears in the contract and matches the negotiated terms.
• The SCI's borrowings are compared with the thresholds for legal entities with no business activity (for example 5.93% for a fixed-rate loan of 10 to under 20 years).
• Overdraft use is compared, at least once a year, with a short-term loan or an assignment of receivables.
• A cash flow forecast makes it possible to anticipate needs rather than suffer excesses.

• From 1 October 2026, the usury threshold for account overdrafts of business borrowers and operating companies is 19.08% (average effective rate of 14.31%), compared with 19.00% in the third quarter.
• For these borrowers, only the overdraft is capped: article L314-9 of the Consumer Code excludes usury and article L313-5-1 of the Monetary and Financial Code reinstates it for overdrafts only.
• SCIs with no business activity remain protected on all their credit, with their own thresholds (from 5.83% to 6.79% for loans in Q4 2026).
• The threshold equals the previous quarter's average effective rate increased by one third; the thresholds for the first quarter of 2027 will be published at the end of December 2026.
• The cost to compare is the TEG, commissions included; an excess leads to the excess charges being set off or refunded.