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BLOG: Doing business in times of crisis, the impossible becomes inevitable

BLOG: Doing business in times of crisis, the impossible becomes inevitable

Leap is an innovation consultancy agency for innovative companies. The company is based at Kennispark and has clearly mapped out the consequences for doing business in times of crisis. Bram de Vries, managing consultant at Leap, will take you through various financing options from which you could now benefit as an entrepreneur. Take advantage of it!

Doing business in times of crisis, the impossible becomes inevitable

Doing business in good times is usually easier than doing business in times of crisis. The Corona crisis once again shows how everyone is forced to be creative, to show perseverance and to put the ‘I’ factor aside. At some point we dare to cautiously conclude what the current crisis has brought us all (‘never waste a good crisis’), including innovative breakthroughs, but also new ways of working. The harsh reality, however, is that we are still in the midst of a crisis in which many families are being hit by unimaginable suffering. That fact makes it almost secondary to also be concerned with the economic impact of the crisis, but many companies are wondering: how are we going to weather this crisis?

Cabinet support measures

Because of the coronavirus, the cabinet decided to take exceptional economic measures. The aim is to protect our health as well as jobs and incomes. For as long as it is necessary, the support measures provide billions of euros each month. In this way, companies can continue to pay their employees and the self-employed can bridge a period without work. Companies can also appeal to more flexible tax regulations, compensation and extra credit opportunities. A clear signpost can be found via VNO-NCW.

Focus on cost reduction

The crux is to make sure that as much money as possible stays in companies. Affected entrepreneurs can more easily apply for tax deferrals, but in the end tax still has to be paid. In order to further reduce costs, the importance of, for example, the WBSO (Promotion of Research and Development Work Act) now weighs heavily, because the effects of paying tax later (and thus a potential peak in the tax burden) are mitigated.

It is not natural for every company to suddenly claim more WBSO benefit. As a rule, innovative companies apply for WBSO for a period of six months, i.e. from 1 January to 30 June 2020. Guaranteed, the current situation has an impact on the hours that various companies wanted to spend on innovation, especially since working from home often has to be combined with childcare. It is therefore quite possible that companies will therefore ‘carry over‘ requested but unused innovation hours as stock to the second half of 2020. In a year’s time, the crisis will reduce the tax benefit for this group of companies. On the other hand, there are also companies that, as we have seen before in the financial crisis, have the luxury of sitting out a crisis. It is conceivable that they will relocate part of their regular engineering and production efforts to R&D, simply because that possibility suddenly exists.

If you are about to start work on the new WBSO application, don’t underestimate its usefulness right now. Certainly if a claim can also be made for the Emergency Fund for Bridging Employment (the replacement for the much-quoted Reduced Working Time), companies will be able to reduce the cost pressure considerably and there will be more certainty of continuity.

Lending money more favourably

Part of the support measures is the expansion of the Guarantee for Small and Medium-sized Enterprises (BMKB-C). In this scheme, the government guarantees a company’s bank loan. The extension allows companies to borrow money from the bank under more favourable conditions, for example in order to be able to pay bills and clear payment arrears. The government guarantees up to 75% of the amount borrowed.

In addition to BMKB, the Guarantee Enterprise Financing (GO) has also been extended. With the GO, the government gives a 50% guarantee on bank loans and bank guarantees. The big difference with BMKB is that GO is also open to larger companies. The maximum per enterprise is temporarily 150 million euros.

Too big to fail versus too important to lose

The financial crisis in 2008 reintroduced the term too big to fail. Several banks and large car manufacturers were rescued from ruin by a government bailout. Even now, we are critically monitoring how aid to very large companies will ultimately relate to smaller entrepreneurs. An important difference with that time is that KLM, for example, did not deliberately take large risks with the expectation of always being rescued because of its economic importance (moral hazard), but was hit hard by the invisible enemy called coronavirus. There is a case for far-reaching government intervention to keep large companies afloat, knowing that many SMEs are dependent on such companies.

Additional challenges for innovative startups

That there are additional challenges for startups in the corona crisis stems from the two financial principles of risk vs. return and going concern. In general it can be said that the established business community is regarded as a going concern. In many cases they operate in the near future (more than 12 months) without worrying about acute liquidation. Of course they also live in uncertain times, but a startup never has the comfort zone of a going concern, unless the entrepreneur has deep pockets.

From the principle of risk vs. return, the difficult situation for startups becomes even clearer. In general, when risk is higher, potential returns are higher. The established business community will not be able to predict the exact profits, growth and sales, but can generally state that there will be reasonable returns. Startups can of course grow into unicorns, but every startup lives permanently in the knowledge that 90% will not make it.

The usefulness of startups for the Dutch economy has proven itself, especially now we advocate specific support measures for this group of entrepreneurs. Expanding the BMKB scheme is fine, but appealing to the BMKB scheme always goes hand in hand with bank financing. A startup needs to be in a good position to get a bank loan at all. One possibility is to open up the extended BMKB scheme to non-bank financing companies or to set up a comparable guarantee fund for this purpose.

Grants and the Corona crisis

In this article WBSO has already been discussed as a point of attention. In practice, we also see that governments generally stick to deadlines that come in sight in the short term when it comes to subsidy schemes, reasoning that it is precisely now that companies can use subsidies. Most striking (subject to change) in this light are per government level:

European Union

  • The EU has immediately relaxed state aid rules. For example, local and regional authorities can subsidise companies up to €800,000 over a period of three tax years instead of €200,000, without this constituting state aid;
  • Most Horizon 2020 calls have been postponed.

Dutch (national) government

  • The deadline for WBSO announcements 2019 remains for the time being 31 March 2020;
  • The opening of MIT Feasibility remains for the time being April 7, 2020. This date can also be seen as a deadline, given the annual risk of over-subscription of the budget;
  • The 1st opening of the SLIM subsidy for individual SMEs still closes on 31 March 2020. Here we urgently appeal to the Ministry of Social Affairs and Employment to move the payment of the subsidy to the time of decision instead of adoption, because companies should not be unnecessarily forced to pre-finance investments in employees in full at this particular time.


  • In the Netherlands, regional innovation programmes are implemented with funding from the European Regional Development Fund (ERDF). The Corona crisis may have an impact on specific projects financed with this money. Matters such as maturity extensions, financial difficulties and on-the-spot checks can be discussed with the relevant Management Authority.
  • The deadline for OP East (ERDF) remains 31 March 2020. A new opening for Gelderland is likely to follow soon thereafter. For Overijssel, this will depend on any remaining budget.

Distinctive in times of crisis

The Corona crisis proves once again that a crisis brings out the best in everyone. Hospitals, for example, are finding creative ways to provide their own mouth caps and the Enschede-based company Demcon (based at Kennispark) is doing everything in its power to supply 500 artificial respirators extra quickly. Our client Luscii, in collaboration with city hospital Onze Lieve Vrouwe Gasthuis (OLVG), has developed a coronacheck in no-time, in which people pass on their health data on a daily basis, so that they can better respond to the care needs in the region.

We sincerely hope for more entrepreneurial initiatives of this kind. Business services can be of service by – taking the example of cleaners, care workers and drivers – taking three extra steps to help entrepreneurs get through this crisis. Incidentally, the most important support has been on our passports since time immemorial: Your maintiendrai.

Bram de Vries
Managing Consultant
Leap. The Innovation Agency



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