Factsheet for measure
NL-2020-27/2087
– measures in Netherlands
Growth Facility (GF): government guarantee on risk-bearing capital
Groeifaciliteit (GF): overheidsgarantie op risicodragend vermogen
Background information
The Growth Facility is a measure that existed before the pandemic, it was set to close on 1 July 2020 as Invest-NL (a private investment company) would take-over this form of financing. However, due to the outbreak of COVID-19, the cabinet in the Netherlands decided that they would extend this measure to 1 July 2023. The reason behind the extension is to help to SMEs impacted during the COVID-19 economic crisis to still have the opportunity to acquire financing for their risk-bearing capital venture.
The strategy behind this measure is to provide a guarantee to financiers who give venture capital to SMEs. If a SME incurs a loss on their investment, they can recoup 50% of that loss. In this case, the government intends to cover the 50% loss incurred by the SME. The guarantee covers losses suffered as a result of the sale of stock, the writing off of a debt, or bankruptcy. The warranty is valid for a maximum of 12 years.
Content of measure
The Growth Facility is executed by the National Enterprise Agency (“RVO”). In terms of the application process, only financing facilities are eligible to apply for this scheme. In the case of entrepreneurs, it is possible to apply for a loan through one of the participating banks or private venture companies. The financier decides whether he will submit a request for a guarantee to RVO for the financing and whether he will ultimately grant the loan. The scheme does not apply to entrepreneurs directly.
The Growth Facility applies different maximum amounts: A bank can provide a guarantee financing up to a maximum of €5 million in the form of subordinated loans. Half of this amount can be brought under warranty. Risk-bearing capital (subordinated loans and/or share capital), provided by private equity firms, is subject to a maximum of €25 million. The guarantee amount is half of this. The government has agreed to adjust the amount of the guarantee in order to make the Growth Facility available to as many enterprises and financiers as feasible during the Corona crisis. Currently, this amount has being adjusted again from €25 million to €50 million.
The Cabinet has made a budget of €85 million per year available.
Use of measure
There is currently no data available on the use of measure.
Target groups
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Workers
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Businesses
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Citizens
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Does not apply to workers
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SMEs
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Does not apply to citizens
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Actors and funding
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Actors
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Funding
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National government
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National funds
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Social partners
Social partners' role in
designing the measure
and form of involvement:
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Trade unions
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Employers' organisations
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Role
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Unknown
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Unknown
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Form
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Not applicable
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Not applicable
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Social partners' role in the
implementation, monitoring and assessment phase:
-
Unknown
-
Main level of involvement: N/A
Involvement
Unknown.
Views and reactions
In a report by MKB-Nederland and VNO-NCO, stated this comment in relation to the Growth Facility scheme: “Subordinated loans are a form between debt and equity. These types of loans have a positive effect on the solvency and thus the financial ability of companies. As a result, they have a larger financial buffer, and it can be more attractive for banks and other investors to provide a loan."
Sources
