As the coronavirus pandemic forces Europeans to stay at home and leaves companies fretting about economic consequences, startup founders across the region are wondering what to do about cash, debt and staff.

Fundraising aside, attention is turning to day-to-day costs and cashflow.

“As always when the wind turns and skies turn grey, as a startup you need to mind your costs and come back to the basics of cash management,” says Albin Serviant, chief executive of company builder Founders Factory in Paris.

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Governments across Europe have unveiled measures for companies, with some specific to small and medium-sized businesses, addressing concerns essentially about running out of cash, not being able to pay off debt and what to do with staff left idle.

Here’s a country-by-country roundup of government-backed resources for entrepreneurs dealing with the consequences of the coronavirus crisis.

This is a living list: we’ll keep updating it as the situation develops. Thank you for your numerous contributions, and if we’re missing anything else, please let us know: [email protected].

France

Main resource: Government-backed startups agency La French Tech’s coronavirus guide.

Measures announced by government:

  • Social charges and tax payments due in March will be pushed back automatically.
  • Companies can request to defer payments of social charges and taxes beyond March.
  • If customers have owed you money for a while, you can ask for a mediator to be appointed to help you recover the funds.
  • If you can’t make debt payments or loan insurance fees, you can ask for a state-backed credit mediator to intervene in your favour and help convince your bank.
  • You can ask for a loan directly from state-backed investor Bpifrance or ask for its backing as a guarantor to get a loan from your usual bank.
  • French President Emmanuel Macron said in a speech that small and medium-sized companies facing difficulties would stop paying rent, electricity, gas and water bills.
  • Temporary unemployment measures will be extended to all companies, allowing them to cut back employees’ hours without straight layoffs. In short, if your company is suffering from a sharp decrease in activity, you can cut back on your employees’ hours worked per week. You keep paying them most of their full salary still and can apply for the government to reimburse at least part of that.
  • On March 25, France announced another set of measures aimed specifically at addressing financing issues, effectively bringing a €4bn cash injection for startups.

Other useful resources:

Germany

Main resource: German startups association Bundesverband Deutsche Startups’s roundup on coronavirus

Measures announced by government:

  • Germany has pledged unlimited liquidity assistance to companies that need cash, in the form of loans provided by KfW, the state development bank.
  • Companies can request to defer tax payments.
  • Germany voted in a law expanding its short-time work scheme called Kurzarbeit. Under it, companies that implement reduced hours for their workers can receive state support. This gives businesses an alternative to straight firings.
  • There are plans to change bankruptcy rules, or at least suspend them for several months, to give companies more leeway on the obligation to file for bankruptcy.
  • The German government announced in early April a €2.2bn bailout fund, but the project is still yet to launch after payment responsibility disagreements. Let’s hope it gets sorted.
  • However, Germany’s €750bn Covid-19 rescue package for companies can be used for startups “that have been in private financing with a company value of at least €50m, including those raised by this round, in at least one completed financing round since 1 January 2017 Capital were valued”, according to The Federal Ministry of Economics. The Social Democratic Party (SPD) secretary general Lars Klingbeil also confirmed this plan on Twitter.
  • A €5bn fund has been released by the state of Baden-Wuerttemberg, specifically to help small companies and the self-employed, and funding for the regional government to take direct stakes in companies.

Other useful resources:

Italy

Main resource: Italian startup association Italia Startup’s SOS page for coronavirus.

Measures announced by government:

  • Companies can ask to suspend tax payments. Those earning under €2m revenue don’t have to pay taxes.
  • Liquidity assistance for small and medium companies by state lender Cassa Depositi e Prestiti SpA.
  • State guarantee of up to €5m for small and medium-sized businesses.
  • Italy also announced mortgage suspension measures in accord with banks. Self-employed workers can ask to suspend or extend mortgage payments and other long-term loans.
  • Part of the stimulus package is dedicated to layoffs and preserving some income for people out of work.
  • The Italian government also released a scheme where self-employed workers and seasonal workers can receive a one-off payment of €600, which could help Italy’s apparent self-employed workforce of almost 5m people.
  • A €220bn deferral on all loans and mortgages for SMEs, payable in instalments until 30 September.

Spain

Main resource: Startup association Barcelona Tech City’s page on coronavirus

Measures announced by government:

  • Possibility of deferring tax payments for small and medium businesses and the self-employed. To do that, you must follow the instructions released by the Spanish Tax Agency.
  • In an update the Spanish Government announced tax and VAT deferrals of up to €30,000 for up to six months for SMEs and the self-employed with annual turnovers of no more than €6m.
  • Payments can be postponed on loans granted by the General Secretariat for Industry.
  • State-backed lender Instituto de Credito Oficial has been given extra means to hand out loans to companies and freelancers in the most affected sectors, including tourism and transport.
  • 100% liquidity support for SMEs.

Other useful resources:

  • Spanish angel fund Encomenda hosted a webinar with advice for founders. Parts of it are summarised in tweets by Encomenda

UK

Main resourceThe government’s page for small businesses affected by coronavirus.

Measures announced by government:

  • The UK government has promised £1bn worth of support for startups. On Monday, the UK government said that it was committing £250m towards a new £500m fund that would invest in high-growth private companies that needed money. The government also promised £750m worth of grants and loans to small and medium-sized businesses focusing on research and development. The startup bailout fund should be available soon.
  • Small companies that cannot afford to pay their tax bills can ask HM Revenue and Customs for a “time to pay” agreement which would suspend debt collection. During the coronavirus outbreak the usual 3.5% annual interest on deferred tax payments will be waived.
  • The government is offering to underwrite loans to businesses adversely affected by the coronavirus outbreak. The scheme will be delivered by the British Business Bank, a state-owned wholesale bank.
  • Small companies will be able to reclaim the cost of 14 days of sick pay — just under £200 — per employee. However, the government has cautioned that they may have to wait months for reimbursement because it has yet to set up a repayment mechanism.
  • The smallest businesses in the country across all sectors of the economy will be able to seek grants worth £10,000.
  • The government has said it would also provide tax breaks and other measures worth £20bn to protect companies and households suffering amid the economic collapse triggered by the virus. This could apply to startups.
  • The government also announced loans to support business with an initial £330bn of guarantees equivalent to 15% cent of UK GDP. Households will get a three-month mortgage policy, it said.

Ireland

Main resource: Scale Ireland’s list of go-tos (it’s a non-profit organisation supporting the development of Irish startups). 

Measures announced by government:

  • Revenue Commissioners are open to discussing deferring tax payments for businesses that are hit by coronavirus.
  • Reduced work hours for employees is possible. The government is planning to refund employers who keep paying at least partial salaries during this time.
  • The Credit Guarantee Scheme supports loans up to €1m; startups are able to apply through Allied Irish Banks (AIB), Bank of Ireland and Ulster Bank.
  • Loans for micro-enterprises from MicroFinance Ireland.
  • Strategic Banking Corporation of Ireland is giving out loans of up to €1.5m through its €200m working capital scheme.
  • Rescue and restructuring scheme packages through Enterprise Ireland for vulnerable but viable firms that need to transform their business.
  • Flat rate pay of €203 per week for six weeks for the self-employed who have lost business and those who have lost employment as a result of coronavirus.
  • Grants available from Enterprise Ireland, IDA Ireland, Local Enterprise Office and Údarás na Gaeltachta for strategies of companies aimed at innovating, diversifying markets and supply chains, and improving competitiveness.

Other useful resources:

Portugal

Measures announced by government:

  • Portugal has announced a €25m plan to support startups. It includes co-investment schemes, financial support for some startup employees, convertible loans and more.
  • Extension of tax payment deadlines.
  • €200m credit line to support companies’ treasury needs.
  • €60m credit line for micro-enterprises in the tourism sector.
  • Support for maintaining employment contracts by taking on most of the cost of a worker’s salary, even if he or she is out of activity, so employers keep a lid on budgets.
  • A special budget to allow people who are out of a job to get some training.
  • Deferred payments on all contributions by self-employed people.

Useful resources:

  • Portuguese entrepreneurs have pulled together to create the tech4Covid19 movement, bringing innovation to fix the coronavirus crisis.

Sweden

Main resource: Ministry of Finance recap of government measures. Measures announced by government apply to companies depending on size and situation of the business.

Measures announced by government:

  • Central government to assume sick pay responsibility for two months.
  • Companies can defer payment of social security contributions, preliminary tax on salaries and value added tax for as long as 12 months. Companies that have paid tax for the first part of 2020 can have those amounts paid back to them from the Swedish Tax Agency.
  • Depending on cases, government will cover three quarters of the costs when staff working hours are reduced and they are temporarily out of work, so companies can retain staff.
  • Riksbank is loaning up to SEK 500bn to companies via the banks to safeguard the supply of credit.

Other useful resources:

  • Verksamt is compiling relevant information for businesses from various Swedish government agencies.
  • Compilation of state aid measures by local media Breakit.
  • Swedish entrepreneurs have started a Slack channel to exchange tips and feedback amongst themselves on coping with coronavirus. 
  • Accelerator Startup Sweden has a survey going for entrepreneurs to help pool their requests and relevant info and push it up to authorities.
  • Call for startups with coronavirus relevant projects, in an initiative from Norrsken, with support from the city of Stockholm.
  • The Swedish government-backed Agency for Economic and Regional Growth addresses questions about themes including financing, hiring and letting people go.

Denmark

Main resource: Copenhagen Capacity, which supports entrepreneurs setting up in and around Copenhagen, is taking questions from entrepreneurs.

Measures announced by government:

  • If an employee is sick, the employer get reimbursed for wages and sickness benefits.
  • Companies can temporarily reduce the work hours of employees and get compensation for some of their pay, provided they avoid firings. Employees can get supplementary unemployment benefits.
  • Special budget for dealing with potential large-scale firings.
  • A total of DKK 60.7bn extra credit available through an increase in the guarantees for small and medium-sized enterprises.

Other useful resources:

  • There’s also a government-backed hotline for businesses at +45 7220 0034.

Norway

Main resource: Oslo Business Region is compiling resources.

Measures announced by the government:

  • The Norwegian government has announced a NOK 50bn liquidity support credit for SMEs with a 90% guarantee. Additionally,  its established a state guarantee credit facility for small and medium enterprises, where the state will guarantee up to 90% of eligible loans.
  • The possibility the deferral of tax payments.

Finland

Measures announced by government:

  • The Ministry of Economic Affairs and Employment has announced an unemployment benefit available to entrepreneurs already receiving a startup grant who cannot work due to the coronavirus (document in Finnish).

Main resource: Detail of measures by Bank of Finland (Finland’s central bank).

Other useful resources:

Austria

Main resource: Austrian Economic Chambers

Measures announced by government:

  • Tax payments deferred.
  • Special loans for tourism companies.
  • Direct loans for affected companies.
  • Credit guarantees for SMEs can be obtained from Austria Wirtschaftsservice, a federal bank.
  • The Austrian government has approved a €38bn funding package to support companies and workers whose income is jeopardised by coronavirus. This includes €4bn in emergency aid for workers with reduced hours and SMEs.
  • The approval of rent subsidies.
  • Full list of government announcements can be found here.

The Netherlands

Main resource: The Netherlands Chamber of Commerce has put together an FAQ for entrepreneurs, and a roadmap for companies.

Measures announced by government:

  • The government announced that its Covid-19 compensation scheme, known as ‘TOGS’, has been expanded to accommodate smaller SME retailers in the food industry, including services like taxis, dental practices, physiotherapists and suppliers of food and beverage outlets. The scheme includes a fixed payment of €4,000 for three months to struggling companies.
  • The detail of government measures is listed here.

Other useful resources:

Belgium

Main resource: Federal and regional government measures in detail.

Other useful resources:

  • Belgium-based non-profit startup grouping Techventures is doing an ecosystem survey across Europe about the impact of coronavirus and sharing results.
  • The self-employed can apply for a monthly ‘bridging grant’ (droit passerelle) of up to €1,290 for individuals and €1,614 for families.
  • The Walloon Region’s government has set up a €233m rescue fund to help provide compensation to struggling SMEs.

Iceland

Main resource: Icelandic government’s response package detail.

Poland

Main resource: Government and institution measures in response to Covid-19.

Other useful resources: 

  • The Polish Development Fund (PFR) has launched funding support for SMEs with between 10 and 249 employees with a maximum annual turnover of €50m or a balance sheet total not exceeding €43m.

Greece

Measures announced by the government:

  • Small companies and the self-employed are receiving support worth €1.6bn through the suspension of social security contributions.

Bulgaria

Measures announced by the government:

  • To reduce the fallout for SMEs, the deadline for annual financial statements has been moved from spring to summer.
  • The government has announced tax deferrals, moving from the end of April to a later date.
  • The Bulgarian prime minister Boyko Borissov has announced a €2.3bn rescue fund to support businesses under coronavirus strain. SMEs are to receive special attention according to Iliya Lingorski, chief economist at BDB, a state-run bank through the implementation of various ‘programmes’.

Remember, this is a living list, we’ll keep updating it as the situation develops. Please point us towards useful resources in your region: [email protected].

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Meziane
Meziane

Thank you for all these details. A table summarising the measures will be useful to compare across countries.

Ronald Diennet -Founder
Ronald Diennet -Founder

Thanks for this informative article but you missed 14 out 27 member states of the European Union? My startup is located in Poland…? By the way, Icland is not a member state of the EU, has a smaller GDP than Poland and less startups but you included it? Why did you not include Switzerland as well?
Thanks for answering
R

Henri Jacobs
Henri Jacobs