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    Existing financing – lender's policies

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  • Six Dutch major banks, non-bank related lenders and financing platforms apply eased policies towards companies in financial distress that cannot comply with their existing financial obligations. More information is provided in this article.

    Policy of the Dutch banks

    The corona crisis has caused financial distress for companies in various industries. As a result, companies seek contact with their banks to resolve this. Six major Dutch banks have decided to allow for a six-month deferment of repayments under existing loans for "financially healthy" companies in all industries. This deferment applies to financing arrangements up to EUR 2.5 million. The joint measure of the banks is aimed at providing help to companies to deal with the consequences of decreasing revenues.

    ABN AMRO Bank, BNG Bank, ING Bank, Rabobank, Triodos Bank and the Volksbank have instituted the policy as supplement to the (financial) measures for companies that have already been taken by the Dutch government. In practice, we see that some of these banks apply the measure in a broader sense, also including companies with a financing arrangement of over EUR 2.5 million.

    Practice has also shown that the respective banks have not formulated strict criteria to review the "financial health" of companies. The banks seem to assess on a case-by-case basis and apply a relatively lenient approach in this respect.

    What does the deferment of repayments entail?
    Corporate clients of the six major Dutch banks may defer repayment of the existing financing obligations for six months. Depending on the bank, deferment is allowed for repayment of principal of the loan and interest or only for repayment of principal. In case of the latter, interest costs will be charged during the deferral period.

    What companies qualify for the measure?
    The criteria are different for each bank. Whether the deferment is granted automatically or requires specific actions to be taken by the company is also dependent on the bank.

    ABN AMRO
    A six-month deferment of repayment of the loan and interest costs is granted to commercial banking customers with a current facility with a principal sum and/or limit of EUR 50 million maximum. Loan repayments and interest costs will not be collected from April until October and can be paid later. The deferment is granted automatically. Companies that do not want to make use of the measure have to contact the bank (online) (only available in Dutch).

    The measure is not applied in relation to all costumer groups. To find out whether your company qualifies for the measure, please consult this Q&A (only available in Dutch).

    BNG Bank
    BNG Bank has announced that it supports the initiative. The bank is currently researching which costumers are eligible for the six-month deferment of repayments of loans.

    If you wish to make use of the possibility to defer repayments, we advise to contact the bank.

    ING
    Dutch SME-companies with a maximum financing arrangement of EUR 2.5 million can request deferment of repayment of their loan. The company must be "financially healthy". The financial health of companies is assessed on case-by-case basis with consideration of all relevant circumstances. An example of a circumstance that is considered to be relevant in this regard is that the company's payment difficulties are a result of the corona crisis.

    Do you want to request deferment? Please use this link.

    Does your company have a financing arrangement of more than EUR 2.5 million? Please contact the bank via 020 – 22 888 22 or your customer relationship manager with ING.

    Rabobank
    SME-companies can request for deferment of repayments of their loan. The request can be submitted through an online form. Requests submitted after 30 March will cover deferment of repayments as of April.

    Rabobank requests its customers to investigate whether they are eligible for government measures, such as deferment of tax duties and the Temporary Emergency Bridging Measure for the Preservation of Work (NOW).

    Corporate customers with a financing arrangement of over EUR 3 million can also make use of the online form to request for a deferment of repayments. Rabobank will reach out to discuss the possibilities.

    Triodos Bank
    Triodos Bank has announced to allow for a deferment of repayments of loans to small businesses and institutions with a with a maximum financing arrangement of EUR 2.5 million. Companies must be "financially healthy", which will be assessed on a case-by-case basis. No specific criteria have been set up to assess this requirement.

    Corporate customers that would like to request for a deferment have to contact their corporate relationship manager with Triodos Bank.

    In case a six-month deferment does not seem satisfactory, other possibilities can also be discussed with the corporate relationship manager. In that case, it is required to submit a liquidity prognosis that assumes a period of three months without revenue and a build-up of revenue thereafter.

    Volksbank
    The Volksbank has not published any specific information with regard to their policy. We recommend contacting the relevant bank affiliated with the Volksbank with which the company's financing arrangements are in place to request for a deferment of payments: ASN Bank (only available in Dutch), BLG Wonen(only available in Dutch), Regiobank (only available in Dutch) or SNS Bank (only available in Dutch).

    Non-bank related lenders and financing platform policies

    Non-bank related lenders and financing platforms play an important role in the financing of small and medium-sized enterprises (SMEs). Altogether, they were accountable for the financing of about 50,000 SMEs and self-employed workers without employees in 2019. A lot of them operate in industries that have been affected severely by the current corona crisis.

    In supplement to the Dutch major banks, certain Dutch non-bank related lenders and financing platforms offer solutions to cope with the consequences of the corona crisis to an increasing extent. This article discusses a number of the instituted measures.

    Microfinancing provider Qredits offers a six-month deferment of repayment to each company that holds a credit with Qredits. During the deferral, the borrower pays an interest of 2%.

    A number of the major Dutch crowdfunding platforms, including Collin Crowdfund (website online available in Dutch) and Geldvoorelkaar (website online available in Dutch), have reached consensus with their investors to grant a 3 to 6-month deferment of payments to their creditors, on the condition that no special circumstances in individual cases stand in the way. Also, several of these platforms have indicated not to charge the usual handling fees to creditors. In the second quarter of this year, it will be decided whether an extension of the measures is necessary, depending on the for now uncertain developments regarding the corona virus.

    In addition to the aforementioned parties, we have noticed that other Dutch parties operating on the market of non-bank related financing also offer various types of solutions to their customers that are facing or coping with financial difficulties due to the corona crisis.

    SME financing foundation – checklist to avoid liquidity issues
    In addition to the aforementioned measures, the Dutch SME financing foundation (Stichting MKB Financiering) – an independent organisation that has been instituted to (among others) contribute to the professionalisation of the Dutch non-bank related financing sector – has put together a checklist (website online available in Dutch) with 12 concrete tips to prevent liquidity issues on the short term for SME-entrepreneurs and self-employed workers without employees.

    SME Credit Guarantee Scheme instituted for non-bank related lenders
    The extension of the Dutch SME Credit Guarantee Scheme (BMKB-regeling), that has been announced earlier, has now also been made available to certain non-bank related lenders. The Dutch SME Credit Guarantee Scheme is a government guaranteed loan (borgstellingskrediet) for SMEs (including new companies), to obtain a loan for investments. The measure is used for investors that want to support SMEs. Under the current Dutch SME Credit Guarantee Scheme, the government effectively guarantees 67.5% of the loan. The SME lender is accountable for other part.

    The Netherlands Enterprise Agency (RVO) has announced that an accelerated accreditation process for the Dutch SME Credit Guarantee Scheme is available to non-bank related lenders to enable fast application of the measure. This way, RVO supports non-bank related lenders to (continue to) finance SME companies. Non-bank related lenders can start accelerated accreditation by using this link.

    More about

    Jelmer Baukema

    Lawyer

    Jelmer is a lawyer in the Finance & Restructuring practice at Van Doorne. Jelmer focusses his practice on advising financial institutions and other domestic and international clients on financing and (debt) restructuring transactions. In addition, he advises clients on legal aspects connected to alternative financing and funding methods such as peer-to-peer (P2P) lending, crowdfunding, debt-based securities and invoice financing.

    Joost Volkers

    Lawyer

    Joost is specialised in insolvency law, commercial contracts, liability issues, litigation and international private law. He also has broad experience in the finance practice. He focuses on advising on and litigating with respect to loan and security documents, insolvency law and various commercial contracts. He also drafts and reviews commercial contracts for national and international clients. In addition, Joost advises on liability issues and any international private law aspects thereof.

    Sjoerd Kamerbeek

    Partner, Lawyer

    As corporate law specialist, Sjoerd advises clients on stakeholder management and counsels companies on commercial and corporate disputes and litigation. In addition, he assists with strategic mergers and acquisitions in connection with takeover and shareholder disputes.

    Stefan van Rossum

    Partner, Lawyer

    Stefan is a financing transactions specialist with lots of experience. He heads Van Doorne’s Restructuring and Insolvency team, and provides advice to banks and investors (including several of the world’s largest hedge funds) on Dutch and international restructuring. Moreover, he has developed outstanding skills relating to acquisitions and other corporate and project financing transactions.