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Posted on: April 14, 2020
The cabinet has announced that it will make € 100 million available for bridging loans to start-ups, scale-ups and innovative SMEs. These loans will be provided through the regional development companies (ROMs) in the Netherlands.
The development of this plan between the Ministry of Economic Affairs and Climate, the joint ROMs, TechLeap and InvestNL has been very intensive in recent weeks. InvestNL and TechLeap are also continuing work on a joint program aimed at innovative startups and scale-ups.
The aim is to enable bridge financing applications from companies by the end of April. In the coming period we will communicate extensively about criteria and the application procedure.
“We are pleased that this arrangement has been made for innovative startups and scale-ups. We hope to be able to provide more details about this scheme and the entire procedure early next week. We will also do this through an extensive Q&A. At the end of April, startups, scale-ups and innovative SMEs can register via an online tool that we will share via our website.”Dina Boonstra, director of NOM
Survival of startups threatened
A TechLeap survey shows that 80% of startups expect to get into financial difficulties due to the Covid19 crisis. 67% are looking for bridging financing due to liquidity problems. The regional development companies are annually involved in about half of the early investments in innovative companies, and thus by far the most active investors in the Netherlands. An in-depth analysis of the ROM’s portfolio companies also shows that a large proportion of these companies will be in acute financial distress in the coming period. Start-ups, scale-ups, as well as other innovative companies have partially been excluded from the arrangements that the government had made so far, although this category of entrepreneurs is crucial for the innovative strength and future earning capacity of the Netherlands.
Temporary bridging financing
With the funds made available by the Ministry of Economic Affairs, the ROMs will provide bridging loans to innovative companies that have run into financial difficulties as a result of the Covid19 crisis. It is expressly intended as an emergency tool to ensure a temporary bridge to break-even or a follow-up round. The amount of the loans varies between € 50,000 and € 2 million. The ROMs will cooperate with InvestNL for larger financing amounts. Where possible, the ROMS will work together with private investors as much as possible. In the coming period, the ROMs will communicate extensively about the criteria, interest and term of the loans and the application procedure.
“As regional development companies, we work with hundreds of innovative companies every day. The Corona crisis has a huge impact on these companies. And we are genuinely concerned that this will seriously damage the future earning capacity of the Netherlands. We are therefore very pleased that the government is allocating a substantial amount to help these companies through this crisis, ”said Rinke Zonneveld (director InnovationQuarter) on behalf of the joint ROMs. “We see it as a great responsibility to ensure that this € 100 million goes to the right companies on behalf of the government.”
The loans can be applied for at via a portal on the site of the common Regional Development Agencies (ROMs) website (in Dutch).
Source in Dutch: eNOMMER 9 April 2020
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