Financing of local initiative platforms
Topic of the practice
Financial support for creating new SMEs or maintaining the existing companies (through no-interest loans)
Good Practice Information
The action has been implemented in order to compensate the difficulties met by people who plan to create or to restart entreprises but lack of personal funds. The Region through the local initiative platforms distribute no-interest or guarantee loans. It can also provide a mechanism of aid for unemployed people who want to create their enterprise (DRAC).These people will thus be able to complete their funds and fulfill bank requirements to have a bank loan. The loan is personally refundable by the project owner.The local initiative platforms' financial aid will help them to pursue or reinforce their activity and to finance their loans. The beneficiaries are the users of the local initiative platforms and are basically persons who do not have enough personal funds to start their business.
To inform people of this action, leaflets are sent to the local structures but also to financial partners of the Regional Programme for Creation and Restarting of Enterprises (PRCTE) and banks.
Local initiative platforms exist all over the French territory. The most important network is ‘France Initiative Network’.Created in 1985, it counts 245 platforms. The Nord – Pas-de-Calais Region counts 24 platforms. They were mostly created thanks to local authorities, i.e. cities or groups of cities. They are often linked to the local Chambers of Commerce. Sometimes banks are also partners. Generally these structures are non-profit companies. The total amount given by the Region is around EUR 1,000,000 per year. The financing is done after an assessment of the project and its maturity, a verification of the financial needs of the platforms and a validation by the Regional council. The Region finances the loan fund only (not the salaries, rents, etc). The Nord – Pas-de-Calais Region does not recover any money when the companies reimburse the loans to the platforms because this money is reinvested in the fund for other loans.
Evidence of success
Financing the local initiative platforms allows the Region to develop its economic tissue by encouraging the creation of new SMEs or the maintaining of existing companies, and therefore the creation of new employment opportunities.
Every year around 1,500 loans are distributed with an average amount of around 7,000€. Many arts and crafts businesses have benefited from these loans. The creation of SMEs or maintenance of companies would not have been possible without these loans. The average amount of a loan depends on the platform: from 5,000€ to 45,000€.
Contact details to obtain further information on the practice
Regional Council Nord-Pas de Calais