TPE, self-entrepreneurs, “too small to survive”?

Last updated:

800,000 self-employed entrepreneurs no longer benefit from the solidarity fund. This situation has been going on since July 1. The date at which the conditions of the solidarity fund were revised, thereby excluding the majority of independents. Thousands of self-employed entrepreneurs and TPEs are now on the brink of bankruptcy. The National Federation of Self-Entrepreneurs is therefore sending a warning signal and is now becoming more virulent with the government. In particular, she explained that she had met Alain Griset, Minister for Small and Medium-sized Enterprises, and had not noticed any improvement in the measures for the benefit of these companies.

The cry of alarm of an ongoing situation

Left behind since July, particularly following the revision of the conditions for the allocation of the solidarity fund, many small and independent businesses are now in a very difficult situation. According to the Federation of Self-Entrepreneurs, only 9.8% of them were able to benefit in September. Yet as many as 68.2% felt they needed this help. And for good reason, 67% of these companies saw their turnover fall by at least 50% compared to their usual turnover.

If the government does not respond, business failures will be very significant in late 2020 and early 2021. While the aid offered in the spring kept many structures afloat, the restart was not done in the conditions hoped for. 69% of micro-entrepreneurs have resumed with a low level of activity that does not allow them to survive in the short term or even to cope with the contributions called in the coming months.

Grégoire LECLERCQ, FNAE president

For example, the National Federation of Self-Entrepreneurs estimates that 250,000 micro-enterprises could close soon. To avoid this, it calls for the re-opening of the solidarity fund to all sectors of activity for at least 4 months. As well as a retroactive application to September 1.

solidarity funds forgetting to compensate tpe and self-entrepreneurs in the context of the economic crisis of Covid-19
The solidarity fund leaves many self-employed entrepreneurs and TPEs on the side. However, it is the SMALL and medium-sized enterprises (SMEs) that make up 80% of the French economic landscape.

Will the aid promised during the reconfination change the game?

To support businesses following the decision to reconfinement,the government has put in place a plan to support companies that are particularly impacted. This plan tackles four major areas, starting with the strengthening of the Solidarity Fund. Then there are actions such as partial activity, cancellation of expenses, adjustment of the EMP or rents. In total, the cost of these measures is estimated at 15 billion euros for each month confined.

In this context, the conditions for awarding the solidarity fund have been slightly reassessed. For example, companies with less than 50 employees who are administratively closed or suffering a loss of turnover of at least 50% for the tourism, event, culture, sport and related activities sectors will be able to benefit from assistance of up to 10,000 euros. For the other sectors, this aid could reach 1500 euros.

On the EMP side, the deadline for applying is extended to June 31, 2021 rather than December 31, 2021. Businesses also have the option of requesting a new one-year deferral for reimbursement. That is two years in total if you add it to the first deferral already proposed. They will also be able to divide their amortization schedule over 1 to 5 years.

On the rent side, the state seeks to encourage landlords to give up their rents. In this context, the 2021 Finance Bill should incorporate a mechanism for donors to benefit from a tax credit. Currently, there is talk of a reduction equivalent to 30% of the amount of rents abandoned.

In light of these elements, the government’s measures are rewarded with a very kind “little better” of most professional associations and trades. Just to apply to the solidarity fund, companies will have to wait until the beginning of December. Or at the earliest from November 20 for those who have suffered from the curfew. The aid arrives late, in addition to not covering all sectors of activity. It is clear, in particular, for the FNAE that companies will have locked the door by then. The emergency mattresses have already been well started by the previous months. As a result, each time and time of floating pushes more and more modest companies into bankruptcy.

Sources

  1. Self-entrepreneurs in the case of coronavirus conducted by the National Federation of Self-Entrepreneurs on 06 and 07 October 2020
  2. Finance for All,“Covid-19 and reconfinement: business support plan”,30 October 2020
More Stories
Charlott’, the success of home sales
X