ING to Lend Up to €128.5 Million to Dutch SMEs With EU Backing

Dutch bank ING will be able to lend up to €128.5 million to fast-growing small and medium-sized businesses (SMEs) in the Netherlands, thanks to a new agreement with the European Investment Fund (EIF). The two announced the deal on 5 November. The EU’s InvestEU program backs it, and most of the money is meant for Dutch SMEs investing in new technology and digital tools. A smaller share is set aside for greener projects.

How the Money Is Split

The deal has two parts. One scheme covers innovation and digital projects and aims for at least €102.8 million in new loans. The other covers sustainability and starts with €25.7 million. Together, they total €128.5 million.

What Kind of Loan Is It?

The money comes as subordinated debt. If a company fails, lenders of this type get repaid only after its main, or senior, lenders. The EIF says the funding is meant to strengthen a company’s finances, and a stronger financial position can leave room to borrow more from other lenders. Because the repayment order is different, any business considering one of these loans should compare the terms with ordinary bank credit.

How the Guarantee Works

Banks participating in InvestEU can have the EIF guarantee part of their lending, with the EU budget backing those guarantees. The EIF therefore shares some of the risk on the loans ING makes. Marjut Falkstedt, the EIF’s chief executive, said, “By covering parts of their portfolios with guarantees, ING can free up more capital to support businesses.”

Laurens de Vos, who leads business banking at ING Netherlands, gave examples of projects that could qualify. One is growth financing for a software company. Another is a business replacing old machinery with more energy-efficient production lines.

Read Also: Top Tips for Starting a Business in the Netherlands

What It Could Mean for Expat Business Owners

If you run a growing company in the Netherlands, for example, a BV that wants to invest in new technology or more efficient equipment, this scheme may be relevant to you. The announcement does not say exactly who qualifies, so the best step is to ask ING directly whether your project fits.

Still planning to start your own company? Our guide to start-up opportunities for expats in the Netherlands is a good place to begin. If you are comparing banks, see our rundown of the best business bank accounts in the Netherlands. Sign up to our newsletter, and you’ll hear more about initiatives like this.

About InvestEU

InvestEU is the European Commission’s program for encouraging investment across the EU. It uses EU money to guarantee loans and investments, enabling banks and funds to lend and invest more. According to the release, that EU guarantee totals €29.1 billion and is expected to bring in at least €427 billion in extra investment. The EIF, part of the European Investment Bank Group, helps deliver the program by supporting small businesses and start-ups in getting finance.