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How to help businesses survive the end of state aid ...

2021-07-21T16:57:48.958Z


A parliamentary report details 52 proposals to avoid the bankruptcy of companies in difficulty. The first meeting of the national crisis exit committee will be held on Thursday. The goal? “Prepare for the leakage” of businesses kept alive thanks to the “whatever the cost” policy. Short-time working, loans guaranteed by the State or the postponement of the payment of social contributions made it possible to avoid business bankruptcies during the Covid-19 crisis. But when state aid is reduced,


The first meeting of the national crisis exit committee will be held on Thursday.

The goal?

“Prepare for the leakage”

of businesses kept alive thanks to the “whatever the cost” policy.

Short-time working, loans guaranteed by the State or the postponement of the payment of social contributions made it possible to avoid business bankruptcies during the Covid-19 crisis.

But when state aid is reduced, between 20,000 and 25,000 companies would be "on borrowed time".

This is what reveals the information report on companies in difficulty because of the health crisis, presented on Wednesday. The fruit of seven months of work, the thick document - of 245 pages - takes stock of the policy of support for the economy put in place by Emmanuel Macron from the first confinement, in March 2020.

“This powerful and effective support explains that, paradoxically, business failures have decreased by 40%

(in 2020)

compared to 2019, ”

says the report. In fact, 600,000 companies have benefited, for example, from 135 billion euros in State guaranteed loans (PGE). But the report also warns about

"an inevitable catching-up effect"

.

And it is the small businesses, which have more cash flow difficulties and a higher level of debt, that are the most at risk.

A business court

The report makes several proposals to support companies emerging from the crisis.

"It is essential to avoid any brutality in stopping aid"

, specifies the document.

But

"it is not assistantship, it is support"

, underlines the rapporteur Antoine Savignat (LR).

Aid which does not create debt could thus be maintained on a case-by-case basis, and the amortization period of EMPs could be extended in certain situations, from six to ten years.

The idea is also to detect difficulties earlier in order to better support companies. In fact, amicable negotiation procedures with creditors, such as the conciliation and ad hoc mandate, lead to an agreement in 50 to 70% of cases. However, they are very little mobilized: this represents 7% of actions opened in court. More than 60% of the proceedings are judicial liquidations.

“There are multiple obstacles to prevention”

, detail the rapporteurs,

“in small businesses, the manager often ignores his difficulties or refuses to see them”

. The court is also seen as a place of failure and punishment.


To combat this phenomenon, the authors of the document recommend turning the commercial court into a company court. “

A place dedicated to the protection and support of businesses,”

explains co-rapporteur Anne-Laure Péret (LREM). Disputes relating to sanctions would be transferred to the judicial tribunal.



And for companies that are experiencing irremediable difficulties?

"It is not desirable to artificially maintain our economy,"

the document emphasizes. Thus, judicial liquidation procedures must be accelerated. The rapporteurs also wish to guarantee a real right to be forgotten.

"In France, we have a real problem with entrepreneurial failure"

, affirms the president of the fact-finding mission, Romain Grau (LREM). To prevent the business manager who has gone bankrupt from finding himself stigmatized, and to allow him to bounce back, the authors of the report recommend reducing the duration of the K-Bis mention.

Source: lefigaro

All business articles on 2021-07-21

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