Few small businesses able to access government-backed Covid loans

Dutch banks provided few government-backed coronavirus loans to small businesses over the past month and a half, Financieele Dagblad reports based on figures from Dutch banking association NVB. Banks told the newspaper that SMEs aren't that interested in these smaller loans. SME experts said that banks aren't that interested in providing these loans.

The government launched the small credit coronavirus support measure, the so-called KKC scheme, on May 29. The scheme is specifically aimed at helping small entrepreneurs through the coronavirus crisis. Through the scheme the government made 750 million euros available to back 95 percent of bridging loans between 10 thousand euros and 50 thousand euros. So far only 22 million euros was paid out, according to the newspaper.

According to experts in the field of small and medium sized enterprises, this is because banks don't want to provide these small loans. 

"We applied for about 20 customers," Han Dieperink of SME consultancy firm IMK said to FD. "Two applications are still pending, the rest have been rejected. While it involved healthy companies. It strongly seems that the banks are not into this arrangement."

SME interest organization MKB-Nederland told FD that banks don't offer the KKC scheme sufficiently. "They don't seem very keen on small credits that they can barely make money on." Banks are allowed to charge 4 percent interest on KKC loans. 

"Entrepreneurs don't only need credit, but also advice and an encouraging word," Hans Biesheuvel of entrepreneurs association ONL said to the newspaper. "And the banks hardly make time for that. No wonder they are less and less popular with entrepreneurs."

The banks themselves stressed to FD that the KKC scheme is available, though they would not provide figures on the number of applications and loans given and rejected, according to the newspaper.

A Rabobank spokesperson said that the bank noticed interest in the KKC scheme, but added that many entrepreneurs decide in orientation to not go through with it because they don't want to saddle their business with extra debt, or rather want to wait and see how the situation develops.

Chris Buijink of NVB said that many businesses got enough breathing room through the postponement of repayments and taxes, which means they are less in need of a loan.