The Small Credit Corona (KKC) scheme is intended for entrepreneurs with a turnover of 50,000 euros or more and who were sufficiently profitable before the corona crisis. They can borrow between 10,000 and 50,000 euros, so that they temporarily have extra liquidity to get through the crisis.
“A smaller entrepreneur in particular may find it more difficult to obtain additional financing or does not immediately see this option as a solution to the problems that arose from corona,” said State Secretary Mona Keijzer of Economic Affairs. “The KKC scheme is ideally suited for this group.”
Risk of default
The loans have a maximum term of five years and are provided by regular banks and other accredited financiers. Rabobank, ABN Amro, ING, de Volksbank and Triodos, among others, have committed to offer loans through the scheme.
It is risky for borrowers to lend money in corona times, because entrepreneurs are more likely than not to be able to repay their loan. The government guarantees 95 percent to cover this risk.
Since the financiers still bear 5 percent of the risk, the idea is that they would benefit from doing a careful risk assessment. For example, the loans must end up with ‘fundamentally healthy companies with sufficient repayment capacity’.
4 percent for the bank
It is often more difficult for small entrepreneurs to obtain credit. Because the amounts they borrow are relatively small, a bank must incur a relatively large amount of costs to provide such a loan.
Financiers who provide loans under the KKC scheme may request a maximum of 4 percent interest. In addition, entrepreneurs pay a one-off premium of 2 percent to the State.
The Ministry of Economic Affairs and Climate expects tens of thousands of companies to make use of the KKC scheme. The cabinet has earmarked 750 million euros for this.