In recent weeks, the world has been experiencing a completely new health situation. The coronavirus continues to spread, forcing some governments to take unprecedented measures. Thus, since 17 March 2020, following Italy and Spain, the French have been confined to their homes. Only those in necessary positions (medical world, supermarkets, etc.) continue to work. This quarantine worries many companies for which the economic fallout could have a catastrophic, even fatal, impact. To avoid this as much as possible, the French government has therefore taken several types of measures.

Payment deadlines for social and tax installments and direct tax rebates.

The government first chose to grant a period of time to companies for the payment of social contributions to the URSAAF. Deadlines may be extended up to 3 months without any penalty. Employers will thus have the option of paying part of the contributions immediately or not at all. These measures also concern self-employed workers (craftsmen, traders, liberal professions). Similarly, companies will be able to defer their tax due dates to the corporate tax services (SIE).

In addition to the deadlines granted, the government is introducing accelerated reimbursement of corporate tax ant VAT credits. Businesses will thus be able to apply for the balance of the claim available for all credits normally refundable in 2020.

To deal with all these financial difficulties, companies will be able to refer their cases to the Commission of Heads of Financial Services (CCSF) and compile a file attesting to the current state of their cash flow. For those in difficulty, they will also be offered the possibility of deferring the payment of rents, water, gas and electricity bills. All these measures will be applied automatically for VSEs and SMEs whose activity has been interrupted following a decree. It will be necessary to examine the particular situations of other businesses before granting these deferrals.

 

Aid from the solidarity fund and cash loans.

In order to help the small businesses most severely affected by the Coronavirus crisis, the State and the regions have set up a solidarity fund. This aid of up to EUR 1500 can be granted to VSEs, the self-employed, micro-entrepreneurs and the liberal professions meeting certain conditions.

• The number of employees must not exceed 10
• the turnover must be less than EUR 1 million
• the annual taxable profit must be less than EUR 60 000.
• companies must be subject to a total ban on receiving the public following the decree of 23 March 2020
• must experience a loss of turnover of at least 50% in March 2020 compared to March 2019.

In addition to the solidarity fund, the State guarantees a loan to support bank financing for businesses. Until 31 December 2020, companies will be able to apply to their banks for a State-guaranteed loan, which may represent up to 3 months of 2019 turnover or 2 years of payroll for younger companies.

The State-guaranteed loan is a one-year cash loan. This loan is granted by the banks, not by the State, but the State guarantees the loan with a guarantee of 70-90% depending on the size of the company. The PGE (prêt garanti par l’État = State-guaranteed loan) can cover up to 3 months of turnover. It is aimed at all economic activities (companies, traders, associations, etc.) with the exception of non-trading property companies, credit institutions and finance companies.

The procedure for benefiting from an PGE will differ according to the size of the company and its turnover. In view of the current health situation, the French Government has therefore decided to launch a €300 billion PGE scheme. It will be compulsory for the loans to be amortized over a maximum period of five years. The aim of the guarantee proposed by the State is to provide the best possible support for firms facing financial difficulties as a result of the measures taken in the context of the health crisis.

 

 

Credit mediation and short-time working.

In view of the number of companies that have been forced to close down, the government has introduced a short-time working scheme (skime). Companies can thus pay an indemnity equal to seventy % of the gross salary to their employees, reaching one hundred % for employees on minimum wage. The State will reimburse companies for wages up to six thousand nine hundred and twenty seven 6927 euros gross.

Finally, the government allows companies to benefit from credit mediation. This mechanism allows companies to reschedule their bank loans.

 

All these measures proposed by the French government have one and inly objective: to provide maximum assistance to companies in order to limit the impact of the coronavirus crisis.

 

Source : https://www.economie.gouv.fr/coronavirus-soutien-entreprises