Many start-ups are still fragile SMEs due to their development model and their positioning on innovative products and services.
In addition to the support of private investors, who must continue to assume their central role during this difficult period, and alongside measures available to all businesses, start-ups can benefit from specific measures:
An 80 million euro package, funded by the Future Investment Program (PIA) and managed by Bpifrance, to finance bridges between two rounds of fundraising.
The targets of this scheme are start-ups that were in the process of fundraising or were due to do so in the coming months and are unable to because of the contraction of venture capital.
These fundings take the form of bonds with possible access to capital and are intended to be co-financed by private investors.
State-guaranteed treasury loans specifically available up to twice the 2019 wage bill in France, or, if higher, 25% of annual revenue as with other businesses.
Backed by the state guarantee adopted in the revised finance law, these loans are distributed both by private banks and by Bpifrance, the primary contact for start-ups, which launches a dedicated product. The guarantee can cover up to 90% of the loan and is offered at a modest cost, depending on the maturity of the loan. For more details on this guarantee, refer to our note: COVID-19 – State-Guaranteed Loan: What steps to take advantage of it?
Accelerated reimbursement by the state of corporate tax credits refundable in 2020, including the research tax credit (CIR) for 2019, and VAT credits.
All companies have the option to request an advance refund of corporate tax credits refundable in 2020 and an expedited processing of VAT credit refund requests by the General Directorate of Public Finances (DGFiP). Start-ups as SMEs and/or young innovative companies (JEI) are eligible for the immediate return of the CIR. They can, therefore, request a refund of the CIR for 2019 from the business tax services (SIE) now and without waiting for the filing of the tax return (“fiscal bundle”).
Accelerated payment of PIA innovation aids already allocated but not yet disbursed, estimated at a total amount of 250 million euros.
At the request of the state, Bpifrance and Ademe are automatically accelerating the payment of PIA innovation aids, like innovation competitions, by preemptively paying out undisbursed portions for already validated files.
Moreover, for companies that have received aid in the form of repayable advances or with royalties, the next repayment deadlines are postponed for up to 6 months.
Finally, the state, through Bpifrance, supports innovative companies by maintaining the innovation aids planned for 2020 (subsidies, repayable advances, loans, etc.). Furthermore, Bpifrance will continue its direct investments and fund-of-funds, alongside private investors.
For more details, you can view the original article on the government’s website here.
