Support measures for startups: webinar provides practical information

New government measures applicable for startups and support provided by the Chamber of Commerce were the two main themes of the second webinar in the series organised by Startup Luxembourg.

Over the past weeks, a number of measures and initiatives have been put in place in Luxembourg that can help startups face the crisis brought about by COVID-19. “New measures are coming all the time,” said Philippe Linster, CEO of the House of Startups and the host of the webinar on 15 April 2020. “There is no fit-for-all solution that suits everyone, so you need to take your time to look into the different measures and see what can help you.”

New government measures for the self-employed, startups and R&D projects

Frédéric Becker, Advisor for financial technology at the Ministry of the Economy, gave an overview of government support measures, both those covered in last week’s webinar and new ones. The new measures include the emergency grant of €2,500 for the self-employed that was announced by the government at the end of last week. It targets self-employed people employing up to 10 staff (including themselves) who take out a salary of less than 2.5 times the minimum wage and are registered with the Luxembourg social security scheme. “Applications are open as of today,” Mr Becker announced.

The government also co-funds R&D projects and investments undertaken to combat COVID-19. “The projects can cover different aspects such as the development of vaccines, medications and treatments, but also medical devices, hospital and medical equipment, and diagnostic tools,” Mr Becker pointed out. “The aid can cover 80% of costs that are typically related to R&D projects.” Financial support is also available for investments made to produce articles needed to fight the disease.

Mr Becker briefly mentioned the StartupsVsCovid19 call for projects launched by the ministry and Luxinnovation last week, which will co-fund 20 projects by startups that can have a positive impact on the social, economic and health aspects of the current crisis. “The selection will be based on criteria such as the solution’s potential impact and the capacity of the team to successfully conduct it and bring the solution to the market,” he said.

“The selection rules will be available online in the next few days, and we will provide further details at the next webinar on 22 April,”added Stefan Berend, Head of Start‐up Acceleration at Luxinnovation.

How the Chamber of Commerce helps

The Chamber of Commerce has set up a COVID-19 helpline for businesses that guides them towards the most suitable support measures and explains application procedures. It has also put in place an accelerated decision procedure for the “Mutualité de cautionnement”, a guarantee fund for companies that need credit or a bank loan. The guarantee is up to 50% of the credit and covers a maximum amount of €250,000 per guarantee. “Companies should ask their bank for a loan, and the banks will apply for a guarantee in their name,” explained Chris Welter, Entrepreneurship Coordinator at the Chamber of Commerce’s House of Entrepreneurship. “We will provide an answer to the bank within 48 hours.”

Together with the Ministry of Labour and other partners, the Chamber has set up the Jobswitch website that connects companies whose staff is in short-term employment or self-employed people who have little work with businesses such as supermarkets, telecommunication operators and transport providers that are overwhelmed with work but lack human resources. “Jobswitch allows you to lend yourself or your employees for work in another company on a short-term basis,” explained Ms Welter.

Combining different measures

Most of the support measures available can be combined, but one main exception is the emergency grant for the self-employed and the grant of €5,000 for micro companies that have been forced by the law of 18 March 2020 to temporarily cease their activity. “It is also important to bear in mind that state aid cannot cover the same cost twice,” Mr Berend pointed out.

The capital grant advances of up to €500,000, however, can generally be combined with other aid. “The basis for calculating the amount that can be allocated to a company is 50% of its salary costs and rent for two months, but the money can be used however the business sees fit,” said Mr Becker. “It is not intended for specific costs.” Ms Welter also pointed out that the European InnovFin bank guarantee mechanism collaborates with the Mutualité de cautionnement and that the two measures can be combined.

Mr Becker reiterated last week’s information about the adapted format of the support for young innovative enterprises, which now offers higher co-funding rates and is open for smaller projects than in the past. “If you are interested in applying, I strongly recommend you to contact Luxinnovation,” he said.

“They will guide you so that you can submit a complete application as quickly as possible.”