Seven entrepreneurs associations and investors are asking the government to develop the new “life-generation” contract, so that part of the French savings go long indeed the financing of unlisted SMEs.

Pussyfoot. This has been attempted to seven investors associations and SME and ETI (midsize) unlisted, in a letter published Tuesday, November 26 to the attention of government and on the reform of life presented by Bercy on November 13.

The French Association of Investors for Growth (AFIC, the lobby of the capital), Growth Plus, Citizen Contractors, 100,000 entrepreneurs, the Center for Young Business Leaders, France and the Digital Richelieu Committee ” welcomed the objective of government to direct a portion of the life insurance to finance the real economy “, but” deplored the absence of a mechanism to ensure that a portion of these savings to invest both in the capital unlisted SMEs.”

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An arrangement without any additional tax expense

For the record, the reform introduced life insurance – among other things – a “life-generation” contract , along with a tax rebate of 20% inheritance tax provided that 33% of the savings will be invested in sectors Bercy deems appropriate economic development. The problem for small business owners and ETI unlisted and private equity investment (specialists unlisted) is that the proportion of 33% is no equally weighted and target SMEs, ETI , listed or not, the social and intermediate housing, or even the social economy.

A tax reduction of 20% on the basis of calculation of royalties due in case of transmission heirs
Learn more a tax reduction of 20% on the basis of calculation of royalties due in case of transmission heirs
Learn more provided that 33% of the savings will be invested in sectors Bercy considers relevant to the economic development of the country. The problem for owners of unlisted companies and private equity investment (specialists unlisted) is that the proportion of 33% is no equally weighted and target SMEs and ETI listed or not, the social and intermediate housing or even the social economy.

“The government’s plan provides no insight into the fact that these amounts will invest in unlisted SMEs. This is even the opposite may be feared, as it is easier to buy the ETI shares listed, do if only because of the liquidity of this investment is to provide a long-term investment in small businesses and proximity, which are a key driver for employment ”

Emphasize the signatories of the letter.

The latter therefore asking the government to develop the famous “life-generation” contract, as follows, and ” without any additional tax expenditure “: the 33% allocated to funding economic sectors said to be useful, a minimum of 8% would be allocated to unlisted SMEs.

6 billion euros missing each year to SMEs and French ETI.

If specialists unlisted, whether entrepreneurs or investors, on the front line, this is ” out of this critical situation where the lack of capital for SMEs and French ETI threatens growth of tomorrow. ” In fact, in France, these companies need 11 billion euros of equity in total, year after year, according to Welsh, Berger-Febrile and Bey lat-Tambourine reports.

Now the capital can no longer provide that € 5 billion per year on average, mainly because its main funders – banks and insurers – are constrained by the new Basel III and Solvency II regulations to disengage the “private equity.” Even the capital development, finance growth and profitable companies already had far more resilient than segments of venture capital and LBO (Leveraged Buy-Out: acquisition indebtedness) is caught by the crisis: the first half, the fund “cap-Dev” invested € 623 million only, a drop of 30% in the space of a year. Bottom line, these are 6 billion annually missing SMEs and French ETI. An amount that represents only 0.4% of the total outstanding life insurance, which amounts to 1.400 billion euros.