The government has announced €100 million for bridging loans to startups, scale-ups and innovative SMEs. These loans will start to be provided through the regional development companies (ROMs) in the Netherlands.*
Very intensive collaboration between the Ministry of Economic Affairs and Climate, the joint ROMs, TechLeap and InvestNL has taken place over the past few weeks in the creation of this plan. Work also continues with InvestNL and TechLeap on a joint program focused on innovative startups and scale-ups.
The goal is to allow applications from companies for bridge funding by the end of April. In the coming period we will communicate in detail about criteria and application procedure.
We are glad that this scheme has come up for innovative startups and scale-ups. We hope to provide more details about this scheme and the entire procedure early next week. We will also do so through an extensive Q&A. At the end of April, startups, scale-ups and innovative SMEs can apply through an online tool that we will share via our website.
Dina Boonstra, director NOM
Startups threatened in survival
A survey by TechLeap shows that 80% of startups expect to run into financial trouble due to the Covid19 crisis. 67% are seeking bridge funding due to liquidity problems. Regional development companies are involved in about half of the early investments in innovative companies each year, making them by far the most active investors in the Netherlands. An in-depth analysis of the ROMs' portfolio companies also shows that a large proportion of these companies will be in acute financial distress in the coming period.
Startups, scale-ups but also other innovative companies fall partly outside the schemes that the government had made so far. While precisely this category of entrepreneurs is crucial for the innovative power and future earning capacity of the Netherlands.
Temporary bridge funding
With the funds made available by the Ministry of Economy, the ROMs will start providing bridging loans to innovative companies that have run into financial difficulties due to the Covid19 crisis. It is expressly intended as an emergency instrument to provide a temporary bridge to "break-even" or a follow-up round. Loan amounts range between €50,000 and €2 million. For larger funding amounts, the ROMs will cooperate with InvestNL. Whenever possible, there will be collaboration with private investors. In the coming period, the ROMs will communicate extensively about the criteria, interest rate and duration of the loans and the application procedure.
"As regional development agencies, 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 of money to help precisely these companies through this crisis," said Rinke Zonneveld (Director InnovationQuarter) on behalf of the joint ROMs. "We see it as a great responsibility on behalf of the State to ensure that this €100 million reaches the right companies."
*It will be ensured that even in the provinces that do not yet have a ROM (North Holland and Utrecht) these loans will be made available to innovative companies.