November 3, 2024
The COVID-19 measures are primarily affecting the engine of the Dutch economy: small and medium-sized enterprises (SMEs).
By April 2020, it had already become clear that these entrepreneurs needed help to bridge their increasing liquidity shortages. At StartGreen, the team immediately asked: how can we use our expertise to support them? We wanted to use our role as a catalyst to facilitate a sustainable restart of the economy.
For a sustainable restart, it is essential that entrepreneurs regain their long-term vision and that concerns regarding liquidity shortages are resolved. To make a significant contribution from StartGreen Capital, we first had to overcome several hurdles. From obtaining accreditation to provide state-guaranteed loans to establishing a new fund: the StartGreen Sustainable SME Fund. I would like to share how we approached this.
Hurdle 1: How do we expand access to credit for SMEs?
Access to credit for SMEs is of great importance to keep the economy running. To increase the availability of credit for them during the COVID crisis, the Netherlands Enterprise Agency (RVO) introduced an accelerated accreditation process for guarantee loans for non-bank financiers.
The SME Credit Guarantee (BMKB) scheme offers financiers a guarantee for loans to companies that cannot provide sufficient collateral. In April 2020, the government added a temporary crisis measure, the BMKB-Corona facility. This creates extra coverage where the government guarantees 75% of the financing provided.
StartGreen Capital was one of the first alternative financiers to qualify for providing these state-guaranteed loans, overcoming the first hurdle. From now on, as a non-bank financier, StartGreen Capital can provide access to BMKB-C credits for sustainable SMEs. The accreditation was secured, but the capital to provide these BMKB-C credits was still missing.
Hurdle 2: How can we finance a fund for sustainable SMEs?
The solution seemed simple: by setting up the StartGreen Sustainable SME Fund. However, fundraising during a crisis and over the summer holidays is a challenge, to say the least. But our strong network at StartGreen Capital showed that several (former) entrepreneurs emphasized the necessity of this fund and were willing to participate as financiers. Invest-NL also wanted to support sustainable entrepreneurs specifically during the COVID-19 pandemic and contributed €5 million. With capital in the fund, hurdle 2 was also cleared, creating room for new opportunities.
Opportunity 1: Helping sustainable entrepreneurs through the COVID crisis
In total, we have over €10 million available from the fund to provide BMKB-C loans with a principal amount between €200,000 and €2,000,000. We can offer personal guidance and speed to reach a long-term solution. The credits have a term of 2 to 4 years with flexible repayment schedules. This financing is specifically aimed at SME entrepreneurs experiencing liquidity shortages due to the COVID crisis, who contribute to one or more ‘Sustainable Development Goals’, and who cannot or do not wish to turn to a bank for financing. Are you or do you know a sustainable entrepreneur and want to know more? Click here for more information.
Opportunity 2: Private financiers can also help entrepreneurs through crowdfunding
In addition to the BMKB-C loans, we saw another great opportunity within our StartGreen portfolio to further strengthen sustainable SMEs. By combining the financing of the BMKB-C loan from the fund with crowdfunding via the Oneplanetcrowd platform, which is also managed by StartGreen Capital. In this way, individuals can also contribute to the sustainable restart of the economy.
The hurdles have been overcome and the opportunities created. The result is a great win-win situation to facilitate the sustainable restart of the economy together! Do you know any sustainable entrepreneurs we can help with BMKB-C financing so they can continue their business? Please let us know: jakoba@startgreen.nl.
Pictured: Jorine Zandhuis, Business Development Manager at Invest-NL, and Jakoba van der Mei, Fund Manager of the StartGreen Sustainable SME Fund.
