Liquidity Support for French Startups


This four million Euro measure was specifically designed to support the liquidity of start-ups in face of the COVID-19 crisis. Prior to the adoption of these measures, the French government had announced other widespread economic support plan to help companies affected the pandemic.  Recognizing the particular characteristics of startups, the government went one step further with the startup-focused support plan outlined below. 


The French government decided to offer refinancing and liquidity measures worth $4.3 billion (€4 billion) in total.

1. Financing bridges between two fund-raising rounds:

Startups that were in the process of raising a new funding round will be able to raise a bridge round through Bpifrance’s PIA (Programme d’Investissements d’Avenir).  Private investors will be able co-invest the same total amount of this funding measure (€80 million).

2. State-guaranteed treasury loans for startups to borrow as much as two years of payroll for employees based in France or 25% of annual revenue — whichever is higher: 

Backed by the €300 billion state guarantee adopted in the dedicated finance bill, these loans are distributed by both private banks and Bpifrance, with a dedicated product. They should represent a total of almost $2.2 billion (€2 billion). The guarantee can cover up to 90% of the loan.

3. Anticipated state refunds of corporate tax credits, including the research tax credit (CIR) for the year 2019, and VAT credits, without waiting for the filing of their annual financial statements: 

While all companies have the possibility to apply for an early refund of corporate tax claims refundable in 2020 and an accelerated processing of VAT credit refund claims by the Public Finances Directorate General (DGFiP), startups as SMEs and/or Young Innovative Enterprises (JEI) are eligible for immediate refund of the CIR.

The corporate tax services (SIE) are mobilised to process the companies' refund requests as soon as possible, within a few days. 

This represents a liquidity injection of $1.6 billion (€1.5 billion).

4. Bpifrance will advance public support grants, and delay repayments:

This will accelerate payment of the PIA innovation support grants (e.g. from innovation contests) already allocated but not yet released. This means, the government is going to transfer $270 million (€250 million) ahead of schedule.

At the same time, for companies receiving subsidies in the form of repayment advances or grants accompanied by fees, the next repayment deadlines are postponed for up to six months.

Finally, the State maintains, through Bpifrance, its support for innovative companies with nearly €1.3 billion planned for 2020 (grants, repayable advances, loans, etc.). Bpifrance will also continue its direct equity investments and investments in fund of funds, alongside private investors.


The following institutions joined forces to adopt these measures:

  • The Ministry of State for Digital Affairs,
  • The General Secretariat for Investment, and
  • Bpifrance, the French public investment bank.

These measures are targeted at startups that were in the process of raising funds or were expected to raise funds during the pandemic months and were unable to do so due to the contraction of venture capital activity.


March 25, 2020: The Government announces this €4 billion emergency plan to support startups


While no direct impact evaluation was found yet, $5.2bn in VC funding was raised by French startups in 2020 (up nearly threefold since 2015).


Cédric O, Minister of State for Digital Affairs. He stated at the announcement of these measures: "Startups have a growing importance in the economy, particularly in terms of jobs. They are also developing innovative products and services whose usefulness is particularly acknowledged by people in the current context of confinement, notably for teleconsultation, telework or delivery. Because of the specificity of their development model, dedicated emergency measures had to be taken to support, alongside their shareholders, the companies whose activity is strongly affected by COVID-19. Overall, startups will benefit from nearly 4 billion euros to improve their cash position”.


Global Entrepreneurship Network
United States
Global Entrepreneurship Network
United States