Foreign investors targetting Dutch small businesses
Dutch small and medium sized enterprises (SMEs) make more and more use of alternative lenders from abroad. Two weeks ago Riverbank from Luxembourg opened shop in the Netherlands, the fifth foreign financial institution that offers loans to smaller Dutch companies to do so. The market share of these new foreign investors is still relatively modest, but the amounts in loans they give double annually, Financieele Dagblad reports.
Alternative lenders Riverbank, Funding Circle, Spotcap, Seedrs and Eureeca all have their eyes on Dutch SMEs, according to the newspaper. And each international investor fills its own niche.
Jeff Lynn, founder of Seedrs, calls his biggest trump the fact that his company offers businesses investors with a pan-European profile. This is great especially for companies who focus their business across the Dutch borders. "We have investors from 65 countries. For a Dutch company that has no plans to cross the border, we offer few extras." Eureeca also puts emphasis on international investors in crowdfunding.
The other three offer smaller loans to companies that may have trouble with traditional banks. Funding Circle and Spotcap give loans of up to a quarter of a million euros per company. Riverbank's loans range from 750 thousand euros to 3 million euros.
Low interest rates in Europe mean that investors are looking for alternative investments. Foreign lenders lend at rates between 6 percent and 14 percent on an annual basis, thus offering attractive returns.
According to Lynn, there is an almost natural symbiosis in the financial world and commerce in the Netherlands. "Dutch people are open to new and innovative ways of banking. There is a lot of active activity and a lively scene of startups, especially in Amsterdam. That attracts investors." he said to FD.