SME emergency: will they survive the reconfination?

The current situation qualifies without any urgency, especially for SMEs. A situation marked by the two confinements of the year 2020. The first, in March, had paralyzed all the country’s economic activity, with the exception of some businesses deemed essential. It is easy to think about food shops, or health services, mobility. This was a particularly difficult time for many companies, which simply could not operate until May, and sometimes even longer. While the new containment has just come into force, with certainly relaxed conditions, the FEEF, representing French SMEs, intends to find agreements with the Government and Distributors.

Measures to respond to the emergency of SMEs

Thus, following the announcement of the reconfinement, the FEEF raised its voice… To propose the implementation of measures to enable SMEs to pass this milestone, once again. These requests are addressed to the Government and Distributors. Their decision-making can change the situation about the future of French companies. The first relates to the State Guaranteed Loan (PGE). This measure already allowed during the first containment, to be able to take out a loan from his bank or a crowdfunding intermediary. This scheme avoids bankruptcies of companies due to a lack of cash, and extends until 31 December 2020. However, the EEF requests that this measure be extended by 12 months.

The HDR sector, which includes hotels, tourism and restaurants, has been hit hard since the beginning of the year. This emergency also concerns the SME suppliers who supply them, which also have a totally halted activity.

Secondly, the FEEF also requires efforts on the part of distributors. A business plan had been concluded for 2020. Their request is that this plan be extended to 2021 for SMEs, in order to help them in trade negotiations. During the current period, a period of health emergency, SMEs and suppliers see their activity impacted. This impact is felt in particular on the delay in deliveries from suppliers to the final customer. Penalties for delayed delivery should therefore, according to the FEEF, be suspended to avoid bankruptcies to the maximum. The urgency for SMEs is also a matter of visibility. In the face of the growth of online sales, the FEEF encourages the presence of salespeople and merchandisers in the stores. This gives SMEs more weight in this exceptional situation.

An “unfair” renewal announcement, not well received by businesses

If organizations such as the FEEF try to propose complementary measures to mitigate the negative effects of reconfinement on the urgency of the situation of SMEs… Other associations, such as the Trade Alliance, see it as a big blow. A shock, which condemns already very fragile sectors of activity. The authorization for some businesses to open, and the blocking of others, impacts, considered unjustified, unfair and incomprehensible. In this period, the big losers are the toy shops. Businesses whose turning point is the end of the year, for Christmas.

Shopping street Christmas town
The streets of the metropolises, usually full for Christmas shopping, are empty. A disaster and an emergency for SMEs.

For the Trade Alliance, this decision deserves a re-study. In order to allow businesses forced to close to have solutions to continue selling, despite everything. All businesses apply strict sanitary measures, to receive their customers under extremely strict conditions. This sudden stop less than 8 weeks before the Christmas holidays is therefore very poorly received. Other shops, such as Addict’s hair salons, have chosen to remain open as late as possible, as in Bordeaux. Because the city did not have a curfew, the salons continued until the last moment, 11:59 p.m. This is a strong act that shows the break between two periods, that of the activity, and that of the total shutdown.

In Bordeaux, businesses that are usually in high demand during this period are closing until further notice, affected by the Government’s containment decisions. Another strong symbol of this new and difficult period is the cancellation of the traditional Christmas Market held in Place Tourny. This event is an event for all local artisans and creators who have come to discover their activity… An appointment this year missed, for Christmas celebrations with a bitter taste for many professionals.

Sources:

Press release – FEEF – 29 October 2020 – FEEF addresses government and distributors to take 5 emergency measures for French SMEs

Press release – Trade Alliance – 29 October 2020 – Reconfinement: so-called ‘non-essential’ businesses sacrificed by incomprehensible, unjustified, unfair measure

French Republic – updated on 17 September 2020 – State-guaranteed loan (PGE) – professionals – service-public.fr

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