From corona hurdles to opportunities with the StartGreen Sustainable SME Fund

November 3, 2020

The corona measures mainly affect the engine of the Dutch economy: SMEs. 

In April 2020 it became clear that these entrepreneurs need help to bridge their growing liquidity shortage. The question immediately arose within the StartGreen team, how can we offer them help from our expertise? We wanted to use our role as a catalyst for a sustainable restart of the economy.  

A sustainable restart requires entrepreneurs to regain their long-term vision and resolve concerns about liquidity shortages. In order to make a significant contribution to this from StartGreen Capital, we first cleared a number of hurdles. From an accreditation for the provision of state-guaranteed loans to the establishment of a new fund: the StartGreen Fund for Sustainable SMEs. I would like to take you through how we approached this. 

Horde 1: How do we broaden access to credit for SMEs? 
Access to credit for SMEs is very important to keep the economy running. In order to increase the availability of credit for them during the corona crisis, the Netherlands Enterprise Agency (RVO) set up an accelerated accreditation for surety loans for non-bank financiers.  

The SME Guarantee (BMKB) scheme offers financiers a guarantee for loans to companies that cannot provide sufficient security. In April 2020, the government added a temporary crisis measure to this, the BMKB-Corona part. This creates extra cover whereby the government guarantees 75% of the provided financing.  

StartGreen Capital qualified as one of the first alternative financiers to provide these loans with a state guarantee, taking hurdle 1. StartGreen Capital can now, as a non-bank financier, provide access to BMKB-C loans for sustainable SMEs. The accreditation was in place, but the capital to provide these BMKB-C credits was still lacking. 

Horde 2: How can we make a fund a fund for sustainable SMEs?  
The solution to this seemed simple: by setting up the StartGreen Sustainable SME Fund. However, fundraising in times of crisis and during the summer holidays is challenging to say the least. But our strong network from StartGreen Capital showed that several (former) entrepreneurs underlined the necessity of this fund and were willing to participate as a financier. Invest-NL also wanted to support sustainable entrepreneurs during the Covid-19 pandemic and contributed € 5 million. With capital in the fund, hurdle 2 was also resolved, which offered room for new opportunities.  

Opportunity 1: Helping sustainable entrepreneurs through the corona crisis 
In total, we have more than € 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 in order to arrive at a long-term solution. The loans have a term of 2 to 4 years with flexible repayment schedules. This financing is specifically aimed at SME entrepreneurs who experience a liquidity shortage due to the corona crisis, who contribute to one or more 'Sustainable Development Goals' and who cannot or do not want to go to a bank for financing. Are you or do you know a sustainable entrepreneur and would you like to know more? Click here for more information.  

Opportunity 2: Private financiers can also help entrepreneurs with this through crowdfunding
In addition to the BMKB-C loans, we saw another great opportunity from our StartGreen portfolio to further strengthen sustainable SMEs. By combining the financing of the BMKB-C loan in addition to the fund with crowdfunding via the Oneplanetcrowd platform, which is also managed by StartGreen Capital. In this way, private individuals can also contribute to the sustainable restart of the economy. 

The hurdles have been cleared and the opportunities created. The result is a great win-win situation to facilitate the sustainable restart of the economy together! Do you know sustainable entrepreneurs who we can help with BMKB-C financing so that they can continue to do business? Please let us know: jakoba@startgreen.nl. 

On the photo Jorine Zandhuis, Business Development Manager at Invest-NL and Jakoba van der Mei, Fund Manager StartGreen Sustainable SME Fund.