The French government has allocated €4bn in funding for start-ups affected by the coronavirus pandemic.
This week, the French government announced plans to roll out a €4bn support plan for start-ups during the coronavirus outbreak. The move was announced by France’s secretary of state for the digital sector, Cédric O.
In January of this year, the politician outlined France’s “clear ambition to be a world-leading country in technology”, after announcing policy changes that were more favourable to start-ups based there.
Now, France’s new support plan, with public investment bank Bpifrance, aims to solve some of the revenue issues that start-ups may face as a result of disruption to business in the coming months.
The start-up support comes from an overall package of €300bn that France is mobilising to support businesses through the uncertainty of the coronavirus pandemic.
O said it is important to support French start-ups in the midst of a crisis, as they represent an important “growing part of the economy – especially when it comes to jobs”.
“They are also working on innovative products and services that have been particularly useful during the lockdown, such as telemedicine appointments, remote work solutions or deliveries,” he added.
The plan includes a short-term refinancing scheme for start-ups, which is worth €160m, the early payment of some tax credits, which is worth €1.5bn, and the accelerated payment of already-planned investments in the sector, which is worth €150m.
Additionally, the €4bn plan includes guarantees over cashflow costs worth €2bn. O also plans to meet up with venture capital funds around France this week to help rally support for the nation’s start-ups.
“Given the global economic situation, there’s a risk that some investors may be wary,” he said.
How it will be executed
The French government is assisting start-ups that were in the process of raising funding by offering them the opportunity to raise a bridge round through a Bpifrance programme. Bpifrance will invest up to €80m in this initiative, which may be matched by private investors.
Start-ups will also be able to borrow as much as two years of payroll for employees based in France or 25pc of annual revenue.
Through the tax credit scheme, start-ups will be able to acquire VAT returns and tax returns more quickly on research and development investments than is usually possible.