Covid-19 Dutch governmental measures for businesses

Clearly, the outbreak of the Coronavirus (Covid-19) has an enormous impact on all of us. A lot of companies are hit hard financially. The Dutch government has taken several measures to support companies in this regard. Hereunder, we have set out the main measures that are currently in place.

Temporary emergency bridging measure for sustained employment

This temporary emergency measure (Tijdelijke Noodmaatregel Overbrugging voor Werkbehoud or ‘NOW-regulation’) concerns a compensation for the employer in the wage costs amounting to a maximum of 90% of the wage sum. As such, it provides financial help for employers to help continuing of the payment of their employees’ wages. The UWV (Employee Insurance Agency) can provide companies with an advance payment of a maximum of 80% of the requested compensation.

To qualify for this, a company must expect a drop in turnover of at least 20%, based on its turnover as from 1 March 2020. The company must furthermore guarantee that no dismissals will be carried out for economic reasons during the period as covered by the financial assistance. The assistance can be requested for an initial period of three months, after which the period can be extended with another three months. Based on this regulation, compensation can also be requested for employees with an on-call employment agreement or a temporary employment agency contract.

Deferral of tax obligations

All companies may request a three-month deferral of their tax obligations, at significantly lower interest rates and also with a temporary waiver of the penalties for late payment. Furthermore, companies can request that their provisional tax assessment is lowered. If a company expects lower profits due to the coronavirus and is currently paying a provisionary assessment for corporate income tax, it can amend its provisionary assessment.

Extension SME credit guarantee Scheme (BMKB)

If a company in the Netherlands employs no more than 250 workers (being a SME), it may be eligible for a guarantee for part of a loan through the SME credit guarantee scheme (‘BMKB’) The Ministry of Economic Affairs and Climate Policy stands as guarantor. This will enable the company to borrow more than otherwise possible based on its collateral.

The SME credit guarantee scheme has now been extended to deal with the economic consequences of the coronavirus. Due to the extension measure, the volume of the SME credit guarantee scheme is now increased from 50% to 75% of the credit given by the financing party. Companies can use the BMKB scheme for a bridge loan, or to increase the overdraft limit on their current account.

Extension of the business loan guarantee scheme (GO)

The Business loan guarantee scheme (Garantie Ondernemingsfinanciering, GO) makes it easier for large and medium-sized companies in the Netherlands to borrow substantial amounts of money. Capital providers receive a 50% guarantee from the government. As a result of the coronavirus measures, companies can temporarily take out a bigger loan under the GO-scheme, with a guaranteed maximum of € 150 million per company (instead of, as applicable prior to this measure, loans of a maximum of € 50 million that were guaranteed to a maximum of € 25 million).

Compensation for companies in hardes hit sectors

All qualifying companies in the sectors that are hit the hardest, such as the hospitality- and the travel industry, will receive fixed compensation of EUR 4,000. Further details in connection with this compensation are yet to be announced. The plan for state support has been submitted for urgent treatment by the European Commission.

Support for self-employed professionals (ZZP’ERS)

An extra, temporary financial support is available for self-employed professionals (zzp’ers) who are experiencing financial difficulties due to the corona crisis. The scheme comes into effect with retroactive effect as from 1 March 2020, and will remain in place until 1 June 2020 at least. Zzp’ers can apply for the support to the municipality where they live.

Postponement for repayment loans small companies

Entrepreneurs who have a loan from the microcredit provider Qredits do not have to repay their loan for a period of 6 months. During this period, the interest will be reduced to 2%. The Dutch government supports Qredits in this regard with 6 million euros.

Measurements banks

Dutch banks also have adopted measurements in order to help companies: companies that have a business loan up to a maximum of € 2.5 million are automatically granted a 6 month break for repayments as well as interest payments on the loan. For loans that exceed the amount of € 2.5 million, banks are also willing to give these companies financial room, however this will be a tailored approach.

You can find this information also in this document, that is prepared by Pellicaan Advocaten N.V. on the basis of the currently available information and serves general information purposes only. For further details or in case you would like us to assist you with anything, please do not hesitate to contact us.