Alternative finance providers were conspicuous by their absence in the press conference about the latest government support package for Dutch businesses. The Dutch government pledged an extra 7.6 billion Euros to help companies of all sizes during the first six months of this year. Many existing support measures were extended with their scope widened, while startup founders (those who set up their own businesses in the first half of 2020) were promised support for the first time.
So far so good. However, apart from Dutch microcredit provider Qredits being tasked with providing corona bridging loans to startup founders, there has been no mention of AltFi playing a role in delivering this extra support. This despite the fact that alternative finance providers are considered a key player in the post-Covid economic recovery of the Dutch SME sector, according to a recent report (in Dutch) by Deloitte.
On the day of the press conference, Dutch media also reported that banks turned down up to 75 percent of corona loan applications, which potentially leaves SMEs in a vulnerable position. When their application is turned down, business owners might feel they have run out of options but nothing could be further from the truth. There is a wide range of alternative finance options available to them that could provide some welcome relief during these difficult times. But more work needs to be done to make sure SME entrepreneurs are familiar with these AltFi options and how to go about accessing them.
As such, it’s essential that the Dutch government makes better use of alternative finance providers in the roll-out of their support programme for businesses affected by corona. It will increase the funding options available to entrepreneurs during this crucial survival phase including, for example, the ability to take out a top-up loan to complement existing corona credit.
Crucially, it will help cement the position of alternative finance providers as credible, trustworthy and competent players in the business finance sector. The ability of SMEs to access alternative finance now and in the long-term will accelerate our economic recovery and future growth.
Eugenie Casier, Risk & Compliance Director at Funding Options, a marketplace for business finance. Find out more about Funding Options here.