Indirect EU support for business start-ups

Business start-ups are one of the many areas in which the European Union is involved. Although it does not provide direct aid for business start-ups, it also funds and loans various European bodies which, in turn, provide aid to businesses. In this way, the EU has put in place a number of tools to help finance business start-ups and takeovers. This is the case of the European Investment Fund (EIF), which acquires stakes in venture capital funds and business incubators. It also provides guarantees to banks and financial institutions that grant loans.

For its part, the European Investment Bank (EIB) grants individual or global loans directly to financial intermediaries, rather than directly to project’s beneficiaries. The European Union also supports the European Business Angels Network (EBAN), which is the pan-European representative of the early-stage investment community. The network is very active in financing SMEs thus contributing to job creation and currently, it has more than 100 members in more than 50 countries. Finally, the European Union also provide financial grants for lagging regions which are experiencing difficulties to support emerging businesses in their territories.

Support for business start-ups from the European Structural and Investment Funds

The European Union also offers a wide range of support for business start-ups via the European Structural and Investment Funds Since the NOTRe Act of January, 27th 2014, these funds are distributed by the regional councils of all French regions, according to priorities that themselves define on the basis of their needs. This aid is intended to support all types of organisations, including businesses, particularly SMEs, universities, research centres, farms, associations, NGOs and local authorities. The ESI funds aims at supporting economy, social and territorial cohesion and strengthen competitiveness in order to generate smart, sustainable and inclusive growth.

There are four funds:

• le European Regional Development Fund (ERDF);
• le European Social Fund + (ESF+);
• le European Agricultural Fund for Rural Development (EAFRD);
• le European Fund for the Development of Maritime Affairs, Fisheries and Aquaculture (FEAMP).

In addition to the ESF, there are a multitude of other European funding opportunities and more specific programmes, such as EaSI, which has been integrated to the ESF+ for the programmation 2021-2027, which supports companies specialising in the social economy to borrow at reduced rates, the Horizon Europe programme for innovative business projects and SOCAMA for construction projets. Today, more than €10 billion in financial aid has been distributed to beneficiaries start-ups in Europe since 2015.

European aid for business start-ups: conditions for obtaining European funding

To be eligible for a European grant, small businesses must first meet certain conditions common to all programmes:

• The business start-up project must be linked to projects initiated in your region in line with the objectives set by the European Union;
• The grants awarded by the European Union and the region to the company must be used for the business creation project and nothing else;
• It must not be a project that has already been implemented and for which you would like to be reimbursed.

To apply for a grant under European programmes for business start-ups or takeovers, you need to contact your local authority directly or apply to a call for proposals to a call for projects launched by your local authority, intermediary bodies such as the Chamber of Commerce and Industry (CCI) or bpifrance, or directly by the EU. When you submit your application, it’s important to add to the description of your project and to emphasise what you could achieve with the funding you’ve applied for. It is also essential to start your application early, i.e. before the project starts and especially before it ends.

For more information, you can go to your local chamber of commerce and industry. There are also a number of Euro Info Centres in France, whose role is to guide entrepreneurs towards the financing options that best suit them. Finally, you should know that 88% of applications in the industry sector receive a positive response to their request, and 52% in the services sector. It would be a shame to miss out on a great opportunity!

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Chloé Bartsch – Jasha Menzel