€100 Million Bridging Financing Start-ups via Regional Development Companies
The cabinet has announced that it will make € 100 million available for bridging loans to start-ups, scale-ups and innovative SMEs. These loans will be provided via the regional development companies (ROMs) in the Netherlands. The development of this plan has been very intensive in recent weeks between the Ministry of Economic Affairs and Climate, the joint ROMs, TechLeap and InvestNL. InvestNL and TechLeap are also continuing work on a joint program aimed at innovative start-ups and scale-ups.
The aim is to enable applications for bridging financing from companies from 20 April. In the coming period InnovationQuarter and other ROMs will communicate extensively about the criteria and application procedure.
Start-ups are threatening survival
A TechLeap survey shows that 80% of start-ups expect to get into financial difficulties due to the Covid19 crisis. 67% are looking for bridging financing due to liquidity problems. The regional development companies are annually involved in about half of the early investments in innovative companies, and thus 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. Start-ups, scale-ups, but also other innovative companies are partly outside the arrangements that the government had made so far. While this category of entrepreneurs is crucial for the innovative strength and future earning capacity of the Netherlands.
Temporary bridging financing
With the funds made available by the Ministry of Economic Affairs, the ROMs will provide bridging loans to innovative companies that have run into financial difficulties as a result of the Covid19 crisis. It is expressly intended as an emergency tool to ensure a temporary bridge to break-even or a follow-up round. The amount of the loans varies between € 50,000 and € 2 million. The ROMs will cooperate with InvestNL for larger financing amounts. Where possible, we will work together with private investors as much as possible.
In the coming period, the ROMs will communicate extensively about the criteria, interest and term of the loans and the application procedure. “As regional development companies, InnovationQuarter 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 cabinet is allocating a substantial amount to help these companies through this crisis, ”said Rinke Zonneveld (director InnovationQuarter) on behalf of the joint ROMs. "We see it as a great responsibility to ensure that this € 100 million goes to the right companies on behalf of the government."
 It will be ensured that also in the provinces that do not yet have a ROM (North Holland and Utrecht), these loans will become available for innovative companies.
Read this press release in Dutch