COVID-19: Grand Est Territorial Fund Project

Published the 03/04/20 | Grants, subsidies and regulations

The Grand Est region is facing an unprecedented crisis, the economic impact of which is still difficult to anticipate but will be significant.

In this exceptional context, all the local authorities wished to mobilize together to provide a responsible, effective, and coordinated response that ensures great equity of treatment throughout the territory. It is to respond very quickly to the needs of businesses, independent workers, and associations that cannot be satisfied by the existing measures, by financing the necessary cash flow to ensure the continuity of their activities while allowing for recovery for the most impacted. The objective of this unique approach is also to ensure, throughout the Grand Est region, and regardless of the territory, an equivalent support to businesses or associations in need.

This fund is also based on the principle of subsidiarity, complementing other measures operated by the State and local authorities and must, in particular, allow for a “last resort” intervention.

The Grand Est Region, the Departmental Councils, and EPCI of the Grand Est, in partnership with the Banque des Territoires, offer support in the form of a repayable advance to strengthen the cash flow of associations, entrepreneurs, micro-entrepreneurs, and small businesses whose activities are impacted by the health crisis.

FUNDAMENTAL OBJECTIVES

Meet the “cash flow need” segment located between the State Solidarity Fund and the Regional Rebound Loan
Provide support to actors – businesses, associations – (i) who are unable to mobilize the support tools put in place by the State, the Region (Rebound Loan), other local authorities, or bank financing, or (ii) whose cash flow need has not been fully covered by these tools
Stimulate the maintenance of activity in sectors considered essential (activity premium)

PROPOSED TARGETS (ELIGIBLE ORGANIZATIONS): ASSOCIATIONS, INDEPENDENT WORKERS, AND BUSINESSES WITH A SIGNIFICANT PART OF THEIR ACTIVITY (50%) AFFECTED BY THE CRISIS

Entrepreneurs, micro-entrepreneurs, businesses, up to 10 employees, not eligible for bank financing
Associations: Between 1 and 20 employees, with less than €500K in association reserves, whose activity is directly related to the fields of culture, sports, tourism, youth, education, environment, health, popular education, social innovation, integration and vocational training, integration through economic activity, and/or with recognition as either a work and assistance establishment or a supported enterprise

PROPOSED THRESHOLDS AND FINANCING, ACCESSIBLE IN THE FORM OF A REPAYABLE ADVANCE WITHOUT INTEREST OR GUARANTEE

Basic Support: Determined based on the cash flow need to ensure essential expenses for the maintenance and resumption of activity, excluding expenses eligible for State measures of postponement/cancellation of charges

Businesses: €5,000 to €10,000
Associations: €5,000 to €30,000

Activity Premium in Essential Sectors (agricultural and agri-food chain + health/safety products, including suppliers and subcontractors, transport, and logistics)

Flat rate per active employee at €500

DISBURSEMENT AND REPAYMENT TERMS

100% disbursement upon acceptance – Repayment with a one-year deferment (possibly renewable if the financial situation of the beneficiary justifies it), over 2 years, on a semi-annual basis

CONTRIBUTION / PROPOSED ALLOCATIONS AND PRINCIPLE OF ATTRIBUTION

Support from the Grand Est Region and the Banque des Territoires

€2 per inhabitant each (€11,127,872 for the Grand Est Region and for the Banque des Territoires) – a total of €22,255,744 for the basic contribution

Proposed contribution of €2 per inhabitant for each participating local authority (Departmental Councils/EPCIs)

Hence, a target allocation of up to nearly €45 million

This mechanism, through this collective effort, thus offers a leverage effect of X4: where the partner contributes €2, in fact, €8 is injected into their territory.

Principle of attribution: the contribution of local authorities (Departmental Councils/EPCIs) is exclusively oriented towards the actors in their territory

PROPOSED IMPLEMENTATION METHODS

Instruction and pre-validation of files entrusted to local authorities or their agencies

Each territory (Departmental Council, group of EPCIs) must define the preferred organizational methods and identify the organization(s) responsible for processing the files
- The organization(s) responsible for processing the files will be responsible for ensuring the eligibility of the applicant for the Resistance Fund
- The organization(s) responsible for processing the files will also be responsible for ensuring that the applicants have mobilized or sought to mobilize all other aid and bank guarantee mechanisms (and guiding them if necessary), and that the Resistance Fund is requested as a “last resort”
- The organization(s) responsible for processing the files will be responsible for determining, based on the information and documents provided by the applicant, the amount of potential financing that can be mobilized
The Grand Est Region will provide the organizations responsible for processing with
- A manual (user guide)
- A standard request form
- A spreadsheet for determining the amounts of allocated financing
- Access to the dematerialized filing portal and a usage guide

Departmental and/or territorial Commitment Committees

Established on a departmental or territorial basis, they must include at least one representative from the Grand Est Region and the Banque des Territoires
Each territory (Departmental Council, group of EPCIs) must define the composition of this Commitment Committee, as well as its operating and file examination procedures
- The Grand Est Region will ensure the secretariat, coordination of the Committee, and access for partners to consult request files (via a dematerialized tele-service)
- The Secretary of the Commitment Committee is also responsible for monitoring the consumption of the available financing envelope in the territory and informing the Committee members on a weekly basis
The Commitment Committees meet on a weekly basis – Filing of requests in the centralized and dematerialized portal
The filing of requests in the dematerialized portal must be done by the applicant, with the support of the organization responsible for processing the files: this support is essential to ensure that the Resistance Fund is requested as a “last resort”
The portal and the information entered are accessible to the teams responsible for processing the files

Official financing decision taken by the Grand Est Region, responsible for managing the Resistance Fund

– The disbursement to the beneficiary is made by the Grand Est Region

– The Grand Est Region provides the Secretary of the Commitment Committees with a weekly report on the level of consumption of the available financing envelope in the territory

Mutualization of recovery risk:

The risk of loss is shared among all partner contributors to the Fund, in proportion to their contribution
Upon closure of the Fund (when all lines have been settled), the Grand Est Region will identify the percentage of losses (unrecovered amounts) on the Fund. The residual amount will then be redistributed to the contributors in proportion to their contribution