France Records Historic 68,500 Business Bankruptcies in 2025 — A Crisis Fueled by Multiple Pressures

France Hits Record Business Failures in 2025

France has entered uncharted economic territory. In 2025, the country recorded a staggering 68,500 business bankruptcies, according to new data released by Allianz Trade — the highest level ever recorded in French history.

This marks a 3.4% increase from 2024 and a 23% jump compared to the pre-COVID era, signaling a deep and persistent fragility among small and medium-sized enterprises (SMEs). The figure also represents the fourth consecutive year of rising business failures, as the aftershocks of the pandemic era continue to ripple through the economy.

Transport, Retail, and Hospitality Hit Hardest

Some sectors have been disproportionately affected:

Transport and logistics saw a dramatic 61% increase in bankruptcies compared to the 2010–2019 average.
Information and communication businesses reported a 42% rise in failures.
Retail and automotive sales went up by 40%, while hospitality and restaurants surged 34%.

According to L’Officiel des Transporteurs, France witnessed almost 10 transport companies going bankrupt every working day during the second quarter of 2025 — a clear indicator of growing tension across key industries.

A Perfect Storm of Financial Pressures

The surge in bankruptcies is the result of multiple overlapping crises.
French businesses are struggling under the combined weight of shrinking cash flow, tighter credit, and rising costs.

Among the root causes:

Late payments: A staggering 86% of French companies report facing delayed client payments, averaging 39.5 days beyond due date.
Cash flow strain: 42% say these delays are due to their clients’ financial distress — causing a domino effect across supply chains.
Rising operational costs: Higher wage bills, energy prices, and loan repayments (especially state-backed COVID loans) are stretching liquidity to breaking point.
High financing costs: Increased interest rates have made it even harder for businesses to refinance or invest in stabilization.

Even large enterprises are suffering. The number of bankruptcies among firms generating over €33 billion in annual turnover has risen 40% above the 2006–2024 average, a worrying sign for France’s corporate landscape.

Political Instability Fuels Uncertainty

The political backdrop is doing little to reassure investors.
Since the dissolution of the National Assembly in mid-2024, France has faced months of fiscal uncertainty, with tension over potential tax hikes and business regulation changes.

Nearly 60% of company directors surveyed admit that this instability has frozen their investment plans. The lack of clear direction on fiscal and corporate policy adds another layer of anxiety for business owners already battling a tough economic climate.

2026 Outlook: A Long Road to Recovery

Experts remain cautious about what lies ahead.
Maxime Lemerle, head of insolvency research at Allianz Trade, warns that 2026 may not bring significant relief:

“2026 doesn’t look any more forgiving,” he explains. “Sluggish growth, continued political and fiscal instability, high financing costs, geopolitical tensions, and global trade shifts will all weigh on French businesses and their cash flow.”

Allianz expects a slight 2.5% decrease in bankruptcies for 2026, bringing the number down to around 66,700 cases. Yet analysts agree that this represents a “high plateau”, with insolvency levels likely to stay elevated for the foreseeable future.

What This Means for Business Owners

For entrepreneurs, staying afloat in this environment requires agility, financial discipline, and adaptation.
Experts recommend that SMEs:

Closely monitor customer payment behavior.
Diversify revenue streams to reduce risk.
Negotiate flexible financing options.
Leverage digital tools to streamline operations and cut costs.

While 2026 may not bring immediate recovery, businesses that adapt early and strengthen liquidity could emerge stronger once stability returns to the French economy.