COVID-19 is dominating news headlines around the world. Given that COVID-19 will have a serious effect on the economy (including SME-businesses), on 12 March the Dutch Ministry of Economic Affairs and Climate Policy (the Ministry) announced measures to mitigate the effects of the COVID-19 pandemic on Dutch businesses. On 17 March, the Ministry partly amended these measures to stimulate the supply of credit in general and support of businesses affected by the outbreak.

We provide a brief summary of the most important measures announced by the Dutch government, which are applicable to businesses and SME-businesses in particular.

Extension of the SME credit guarantee scheme

The SME credit guarantee scheme (Borgstelling MKB-kredieten) will be extended from 16 March 2020 to 21 April 2021. The SME credit guarantee scheme allows SME’s (without or with insufficient access to bank credit) to obtain credit from a bank as the Ministry will act as a guarantor. As of 16 March 2020, SME’s will be able to obtain 75% (prior to the Coronavirus, it was 50%) of their total required credit with a 90% guarantee from the Ministry. The SME credit guarantee scheme applies to businesses with less than 250 employees and a maximum turnover of €50 million per year or a maximum balance sheet of €43 million. The Ministry announced it will directly make available an additional amount of €300 million to fund the increase.

Extension of the business loan guarantee scheme

Irrespective of the applicability of the SME credit guarantee scheme, the business loan guarantee scheme (Garantie Ondernemingsfinanciering) will still apply until 31 May 2020. Under the business loan guarantee scheme, financiers can apply for a guarantee from the State for 50% of the credit they provided to companies. This scheme does not only apply to SME. Prior to the COVID-19 outbreak, the scheme was applicable to financing from € 1.5 million to €50 million. Under the temporary extension proposed by the government, the scheme will be applicable to loans of up to €150 million. Furthermore, the government decided to increase the available funds for the business loan guarantee scheme by €1.1 billion to a total of €1.5 billion.

Government support of Qredits

Entrepreneurs that have obtained credit from microcredit provider Qredits will not be obliged to repay their loans for the next 6 months. In addition, the interest rate over the course of these 6 months is lowered to 2%. The Government will provide Qredits with €6 million of financial support.

Support for entrepreneurs in the hospitality, travel and event organization business

The government will provide businesses in these and other related sectors with a set compensation of €4,000. The terms of this compensation are yet to be announced. As this initiative qualifies as state support, this initiative was submitted with urgency to the European Commission for its views.