Updated: Covid-19 Coronavirus: Overview of government guarantee schemes in the Netherlands

1. Corporate Finance Guarantee (Garantie Ondernemingsfinanciering) (GO)

Current GO-scheme

Under the GO-scheme, the Dutch State guarantees half of any new funds which banks make available to Dutch borrowers.

In 2009, the Ministry of Economic Affairs and the Dutch banks joined forces to fight the negative effects of the credit crisis. One of the measures they implemented was the Garantie Ondernemingsfinanciering (GO) (Corporate Finance Guarantee), an arrangement designed for large and medium sized businesses affected by the crisis.

The GO-scheme is still in force and in light of COVID-19, the Dutch government announced extending the scope of the Corporate Finance Guarantee in its letter of 17 March 2020 (in Dutch only). This extension is effective as of 28 March 2020.

The key changes to the existing rules are:

For further details, please refer to the information published by the government (in Dutch only, requires updating).

Submissions for the GO-scheme must be made by 31 May 2020.

Allen & Overy has extensive experience in implementing GO facilities, both on a bilateral basis and as part of syndicated credit facilities. Typically GO facilities are used for liquidity purposes in existing banking relations (by adding a new GO-supported credit line).

Corona Module / GO-C

Under the European state aid laws, the Dutch government can adopt additional support measures. The European Commission has published a Temporary Framework (updated on 3 April 2020) describing measures that EU member states can adopt with the aim of ensuring access to liquidity for undertakings facing a sudden shortage due to COVID-19. These measures include: (i) direct grants, repayable advances or tax advantages; (ii) aid in the form of loan guarantees up to 90% of the loan; or (iii) aid in the form of subsidised interest rates for loans. For more information on the Temporary Framework, please refer to this note on our blog.

With regards to aid in the form of loan guarantees the Temporary Framework provides for the following:

• Minimum guarantee premium:

• The public guarantee is granted 31 December 2020 at the latest;
• For loans which mature >31/12/2020 the following maximum amounts shall apply:
  • twice the annual wage bill;
  • 25% of 2019 turnover; and
  • when there is appropriate justification, a higher amount to cover liquidity needs for the coming 12 months for large enterprises and 18 months for SMEs;
• For loans which mature ≤31/12/2020 the maximum amount may be higher, but with appropriate justification (i.e. proportionality of the aid remains assured);
• The public guarantee may not exceed:
  • 90% for pro rata loss sharing by the bank and the Dutch State; and
  • 35% where losses are first attributed to the Dutch State and only then to the credit institutions ("first loss guarantee").
• The guarantee shall relate to investment and/or working capital loans; and
• The guarantee may not be granted to undertakings that were already "in difficulty" on 31 December 2020 

2. Suretyship agriculture (Borgstellingskrediet voor de Landbouw) (BL)

The BL-scheme enables agricultural companies to attract financing in amounts that would otherwise not be possible.

The Dutch government has announced that bridge financing will become available under the scheme by letter of 17 March 2020 (in Dutch only) and publication of the legislation on 19 March 2020 (with retro-active effect). Key characteristics of the BL-scheme are (effective as of 18 March 2020):

• up to EUR2.8m of bridge financing;
• term of up to two years;
• amortising or bullet loan;
• upfront fee 3% (1% for start-ups);
• subject to a 70% government cover; and
• applications before 1 April 2021.

For further details, please refer to this information published by the government (in Dutch only, requires updating). 

3. SME guarantee scheme (Borgstelling MKB Kredieten, BMKB)

This scheme enables small and medium enterprises* in the Netherlands to attract financing in amounts which would otherwise not be possible.

The Dutch government has announced that measures will be taken to support SMEs by letter of 12 March 2020 (in Dutch only). According to the letter of 16 March 2020 (in Dutch only), the key characteristics of the scheme as of 16 March 2020 are:

• BMKB government budget is increased from EUR765m to EUR1.5bn;
• accreditation becomes available to financiers other than banks to enable them to finance their clients using this extended BMKB scheme;
• up to 75% of the credit needs can be financed by the government under the scheme, which is subject to a 90% cover by the government; 
• BMKB interest percentage is lowered from 3.9% to 2%;
• credit arrangements up to EUR1.5m; 
• scheme remains in force until at least 30 June 2022; and
• anticipated expansion of credit availability for SMEs EUR300m.

4. Interest rebate for small entrepreneurs on microcredits "Qredits" 

Microcredit provider Qredits finances and coaches a large group of small companies and start-ups that find it difficult to obtain financing up to EUR250k. In light of Covid-19, the Dutch government has announced by letter of 17 March 2020 (in Dutch only) that it will support Qredits in an amount up to EUR6m to allow for Qredits to extend credits by up to six months and a decrease the interest rates to 2% during such extension period.

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^{*(<250 employees (FTE) and ≤EUR50m revenue or ≤EUR43m balance sheet total)}

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Other relevant publications on our blog include:

Dutch economic measures relating to COVID-19 Coronavirus

COVID-19 coronavirus: 10 key points for effective contingency planning

COVID-19 coronavirus: 10 questions and answers for employers in the Netherlands

COVID-19 coronavirus: Points to consider on M&A transactions