Covid-19 Coronavirus: Dutch guarantee support schemes (GO and GO-C) for loans to SMEs and large enterprises

One of the measures the Dutch State has put in place with a view to supporting companies that are affected by Covid-19 is an expansion of the already existing corporate finance guarantee (Garantie Ondernemingsfinanciering) (GO), which was initially set up in the context of the credit crisis. Under the GO scheme, the Dutch State – in short – guarantees part of new funds which banks make available to borrowers with substantial business activities in the Netherlands.

Under the European Dutch State aid laws, the Dutch government can adopt additional support measures. The European Commission published a Temporary Framework (TF) dated 19 March 2020 (updated on 3 April 2020) describing measures that EU members can adopt to ensure access to liquidity for companies facing a sudden shortage due to Covid-19. The European Commission has approved a Covid-19 state aid framework proposed by the Dutch State under the name Garantie ondernemingsfinanciering uitbraak coronavirus (the GO-C).

The key differences between the GO and GO-C are:

• loans up to 8 years for the GO scheme and up to 6 years for the GO-C scheme;
• loans under the GO-C scheme must be to finance liquidity needs as a result of Covid-19 only;
• GO-C loans cannot be subordinated;
• the amount of GO-C loans is capped at twice the annual wage bill, 25% of the 2019 turnover or such higher amount necessary on the basis of the liquidity forecast of the borrower;
• the guaranteed amount is increased from 50% under the GO to 80% (large enterprises) or 90% (SMEs) under the GO-C;
• to qualify for GO-C support the borrower must not have been in financial difficulties on 31 December 2019; and
• the GO-C requires payment of a minimum provision in line with the TF.

Our in-depth comparison between the GO and GO-C

Covid-19 GO vs GO-C Comparision