The Covid-19 pandemic is hitting our startup ecosystem–hard. But it doesn’t mean we’re taking this lying down. All around the country, there are bold initiatives from our communities, the government and from great companies all doing their part. We’re compiling the best and the latest in this newsletter. Expect to get the following weekly:
– Updates straight from the government on emergency measures (No fake news here)
– Useful info for entrepreneurs who need help
– Some of the best stories of startups and other members of La French Tech working against the virus and its negative effects on the country
French Tech is fighting back.
The French Tech Mission
France launches an Emergency Startup Relief Plan of 4B EUR
Our startup ecosystem remains a cornerstone of the French economy. The aim of this emergency plan, unveiled by Cédric O, Minister of State for Digital Affairs, is to safeguard the community’s momentum. Here is a break down of the 4 billion:
● 80M EUR in emergency funding to help startups bridge rounds. This fund extends financing in the form of convertible notes, intended to cover a company’s expenses until long-term funding is secured in their next round. As with most forms of government funding, this is a matching fund requiring the company to raise a proportional amount from private investors
● 2B EUR in state-guaranteed cash-flow loans for up to twice your company’s 2019 payroll in France, or 25% of annual revenue (if this figure is higher). Backed by the €300 billion EUR state guarantee recently adopted in Parliament, these loans are distributed by both private banks and by the French government’s public investment arm, Bpifrance. The guarantee can cover up to 90% of the loan and is priced at a low cost, depending on the maturity of the loan. More details here in French.
● 1.5B EUR in cash advances through the fast-tracked repayment of corporate tax claims that are refundable in 2020, including the 2019 R&D tax credit (CIR) and VAT credits. Instead of having to wait until the end of the fiscal year to apply for a refund, startups can apply immediately. France’s Corporate Tax Services (SIE) have instructions to process the requests in a matter of days. French startups, reach out to your contact at the Public Finance Directorate General (DGFiP).
● 250M EUR in early payments of PIA Innovation Grants. Every year, France has a national Innovation Competition which awards the country’s most innovative startups in either grants or repayable advances. Given these trying circumstances, we’re delivering payments much earlier than anticipated to boost their cashflow.
● 1.3B EUR of additional startup funding in various forms (grants, repayable advances, loans, etc.) through Bpifrance who will also be pursuing direct equity investments and investments in fund of funds.
A one-stop knowledge base for entrepreneurs seeking government aid
Information is key in times like these.
We have been working hand in hand with the Ministry for the Economy, the Ministry for Labour, Bpifrance, the Banque de France and Urssaf to provide you with a platform centralising all the information entrepreneurs need to understand and access government emergency relief for businesses.
Is your company eligible for partial “technical” unemployment? How can you receive Bpifrance’s emergency assistance? What are the conditions for taking out loans guaranteed by the government?
You’ll find most of the answers you need here. And if you don’t, the platform also provides contact numbers of those who might be able to help.
Some of our favorite startup stories from the trenches:
● The Ministry for the Economy partnered with one of our Next40 companies, Mirakl, to create a government-backed marketplace connecting manufacturers of health products in high-demand during Covid19 with French citizens. The list includes hydroalcoholic gel, masks, gloves and respirators.
● Another notable partnership between our Ministry this time with retail-tech companies: Startups such as Lydia, Wynd and Cubyn are primed to propose preferential offers to enable local retailers to continue with their business activities. These offers are listed here.
● Solidarity between French citizens is materialising worldwide with SOS UN TOIT: rolled out at the initiative of French Tech entrepreneurs and the Ministry for Europe and Foreign Affairs, this platform connects up French citizens who are blocked abroad with French citizens living outside France who can accommodate them on a temporary basis.
● A list compiled by our friends at France Digitale of startups that could help you get through this crisis, covering everything from remote work to leisure. Featuring Next40 startups like OpenClassrooms, Frichti and Klaxoon.
COVID-19: the top five FAQ on corporate support measures #1
As you are right at the forefront, you are well aware that the COVID-19 pandemic and its fallout are having a very substantial impact on our community. At the request of the Minister of State for Digital Affairs, Cédric O, government departments are fully primed to answer the hundreds of requests received from startups every day.
Against this backdrop, the network of French Tech Correspondents (dedicated contacts in 50 ministries and public services) that we set up last year will prove to be more useful than ever. The correspondents will enable us to focus on the most important questions and answers which we will share with you in a special weekly article.
- Short-time working (chômage partiel): how can I simulate the amount of government compensation and the balance to be assumed by my company?
The goal of short-time working is to keep your staff employed in your companies despite a drop in activity (on the contrary, this scheme should not cause you to stop or cut back your activity if it can lawfully be continued whilst ensuring health safety). You are aware that applications should be filed on the Ministry of Labour’s dedicated website. Below is some information to help you assess how much this will cost you:
- Determine who can be on short-time working: all employees (permanent and fixed-term contracts, apprentices, etc.), including those on trial periods. It does not apply to heads of simplified joint-stock corporations, senior executives and interns.
- The amount is calculated based on legal working hours (35 hours/week). An employee who has a 39-hour contract who works only 20 hours will be compensated for 15 hours (35 minus 20).
- Employees with employment contracts based on the number of days worked per year (forfait-jour) are only eligible for part-time working if their department or establishment is completely closed.They are therefore not eligible in the case of a cutback in activity that affects only part of the staff. If they are eligible, the calculation is made on a half-day basis, at the rate of 7 hours per day.
The Ministry of Labour has a simulator of the amount of compensation for companies in the event they have to use short-time working. It is scheduled to be updated in the near future to take account of the changes to short-time working arrangements announced in the last few days.
2. COVID-19: what rules should be introduced to protect the health of my teams?
You are already on the front foot to protect the health of your teams. Many of you are wondering how to assess the risks, mainstream teleworking, protect your staff in the workplace and act in the event of contamination. Below are a number of rules laid down by the Ministry of Labour:
- Teleworking should be standardised whenever possible. At-risk employees should all work remotely or be granted a work stoppage (arrêt de travail)
- Attending the workplace now requires a professional travel certificate (justificatif de déplacement professionnel) “for imperative reasons originating from the employer”
- Employees in the logistics industry must take special precautions
Find further information here.
- How can I benefit from a government-backed cash-flow loan?
Private banks are continuing to provide the majority of corporate financing. Ensuring this continuity is the ultimate goal of these government-backed loans.
It’s very simple: you take out a loan from a private bank, and the French government provides the guarantee. Here’s how you can benefit:
- A government guarantee will be extended to all loans taken out between 16 March and 31 December 2020
- Loans may be for up to 25% of the company’s annual turnover in 2019 (reported or last closed-out financial year)
There are specific arrangements that concern many startups. Innovative companies (innovative startups (JEI) or those having received government financing for innovation, etc.) may be entitled to an amount of twice their 2019 payroll in France, excluding employer contributions.
- A one-year deferred repayment period with a clause that can be exercised by the borrower to enable it, after this first year, to opt to repay the loan over 1, 2, 3, 4 or 5 years more.
- The government guarantee will cover 90% of the amount of the loan for VSEs, SMEs and mid-tier companies, in order to facilitate lending.
- Loans may not be subject to any other guarantee or security.
To benefit, simply contact the financial adviser at your bank and request a government-backed cash-flow loan. You can find details of this product here. According to Maurice Oms, our French Tech correspondent at the Banque de France, in case of difficulties with your bank, you can contact the Credit Mediator here.
- Payment delays, delivery difficulties, non-performance of contracts: how can I manage problems with my partners?
In the current circumstances, many companies are having to contend with problems both in France and abroad. Many of you are facing difficulties relating to late payments, logistics and non-compliant products. The situation calls for solidarity initiatives which are on the way and are slated to continue in the coming weeks.
The Business Mediation Department at the Ministry for the Economy and Finance is available to assist you. Nothing could be simpler: a mediator will contact you within seven days to help you come up with a confidential action plan. Both business secrecy and company reputation are safeguarded.
How can I do this?Make online referrals on the dedicated website.
- How can I manage childcare by my employee(s)?
You may be an entrepreneur or an employee, but you may also be a parent. To facilitate childcare, employees who cannot work remotely and who do not have childcare solutions for children under 16 years of age have the right to request a work stoppage from their employer.
- The work stoppage is compensated by the National Health Insurance Fund, without any waiting period (délai de carence)
- You do not need to go and see a doctor
- The employer cannot refuse and must declare it using the dedicated website
- Only one parent may request a work stoppage for a given period
We hope that this information will be of use to you. Please share this article and sign up for the French Tech newsletter to receive weekly updates concerning corporate support measures.
– Sifted (Financial Times) a publié un récap des aides gouvernementales destinées aux entreprises à travers l’Europe. Utile si vous opérez dans plusieurs pays.
– France Digitale a réalisé une liste de startups qui peuvent vous aider en cette période de crise, en incluant des membres du Next40, comme OpenClassrooms, Frichti ou Klaxoon.
– Cédric O, le Secrétaire d’État chargé du numérique, a répondu aux questions de BFM Business sur la mobilisation de la French Tech pendant cette crise. À voir ici