Financing SMEs and Entrepreneurs 2024

5. Belgium

Key facts on SME financing

In 2022, SMEs dominated the business enterprise landscape in Belgium, accounting for 99.8% of all firms.

The outstanding stock of SME loans was stable on an annual basis (+0.9%) compared with an increase of 4.5% the previous year. This relative stability can be explained by the global economic context and the significant support measures taken by the Belgian government in the context of the COVID-19 crisis.

SME interest rates increased significantly to 2.06% in 2022. The interest rate spread between loans charged to large enterprises and loans charged to SMEs remains virtually unchanged at 15 basis points.

Survey data illustrates that lending conditions eased between 2013 and the end of 2015 and remained relatively stable until the end of 2018. A deterioration of credit conditions for SMEs has been reported since the fourth quarter of 2018, and the latest figures from third quarter 2023 confirm this trend.

After a fall in leasing volumes of -8.14% in 2020, this activity recovered in 2021 and 2022 with an annual growth rate of 13% and 13.9% respectively. High inflation, which pushed up asset prices, and the announcement of a number of tax changes for vehicles supported this strong growth in 2022.

The factoring business has also expanded significantly over the last two years, with annual growth rates of 21.6% in 2021 and 25% in 2022. This increase can be attributed to the potential decline in factoring experienced in 2020 as a result of the COVID-19 pandemic, followed by robust developments in the last two years.

The amount of venture and growth capital investments fluctuates considerably due to the small number of deals conducted annually. After nearly doubling from 2020 to 2021, these investments decreased by 26.1% in 2022, totaling EUR 1.1 billion.

After a steady decline from 2016 to 2020, average payment delays for business-to-business transactions rose to 11 days in 2022. This is slightly below the annual average of 12.7% for the reference period (2009-2022).

The number of registered bankruptcies increased to 9 265 (+42%) in 2022. This increase can be explained by the end of various support measures for businesses taken in the context of the COVID-19 crisis, including the end of the moratorium on bankruptcies. However, the total number of bankruptcies remains lower than the number recorded in 2019 (10 598).

Policy initiatives to ease SMEs’ access to finance have been taken at both the federal and regional levels. In 2021 and 2022, policy measures were primarily aimed at protecting healthy businesses in the context of COVID-19 and the energy crises resulting from the Russo-Ukrainian conflict.

For example, the ‘Overbruggingslening’ aims to support Flemish companies, including those in agriculture, horticulture, fisheries, and aquaculture, that have acute liquidity needs due to the war in Ukraine, rising energy costs, and the overall increase in price levels. The terms of this loan include a minimum loan amount of EUR 10 000 and a maximum amount of EUR 2 million.

Another case in point is the “Fonds de transition” programme, which started in September 2022. The objective of the programme is to finance SMEs in Brussels that need to transform their business models and production lines in order to meet regional and European environmental and climate objectives. The financing terms include amounts ranging from EUR 80 000 to EUR 1.5 million through loans, bank co-financing, quasi-equity debt or minority equity stakes in companies.

The Chèque-Entreprise Relance par le numérique or Business Voucher Digital Recovery programme in Wallonia started in November 2022 and is set to end on 31 August 2023. The objective of the programme is to help SMEs boost their digitalization, online activities, and cybersecurity. Public intervention amounts to 90% of the amounts concerned with variable ceilings for each phase, for a total subsidy of EUR 15 000.

In light of escalating energy prices and their subsequent effect on production costs and professional expenses, the Federal Government has launched the ‘Droit Passerelle Energie’ initiative to support self-employed workers, helpers, and assisting spouses who opt to pause or terminate their independent activity due to diminished profitability. This scheme offers an allowance for a duration of up to 12 months and maintains healthcare and disability benefits for up to 4 quarters without needing contributions.

Table 5.1. Scoreboard for Belgium

Indicator	Unit	2007	2008	2009	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Debt
Outstanding business loans, SMEs	EUR billion	82.8	89.1	88.9	93.9	100.0	109.6	109.5	100.7	104.4	108.0	115.7	123.9	130.9	133.8	138.0*	*
Outstanding business loans, total	EUR billion	134.2	149.4	141.8	150.6	153.7	167.6	162.0	151.7	164.6	163.4	173.6	184.1	193.0	200.0	201.8*	*
Share of SME outstanding loans	% of total outstanding business loans	61.72	59.62	62.73	62.35	65.07	65.43	67.60	66.39	63.44	66.12	66.66	67.31	67.8	68.39	68,41*	*
Outstanding short-term loans, SME	EUR billion	37.4	40.4	34.1	35.4	36.5	34.5	33.8	31.4	30.9	32.0	33.6	36.7	36.7	34.7	35.1*	*
Outstanding long-term loans, SME	EUR billion	59.7	66.1	72.2	77.2	79.3	82.5	83.9	80.3	84.8	90.8	97.8	103.4	109.6	115.5	124.4*	*
Share of short-term lending, total	% of total business lending	45.14	45.31	38.37	37.71	36.46	31.45	30.90	31.13	29.58	29.62	29.05	29.60	28.07	25.39	25.44*	*
Government loan guarantees, SMEs	EUR million	..	156.5	411.9	553.9	317.5	266.0	480.2	265.6	448.2	398.3	458.4	612.2	520	777	1 021.5	569.4
Government guaranteed loans, SMEs	EUR million	..	312.7	832.7	888.4	561.7	484.3	826.1	476.7	805.6	735.9	828.3	1130.3	993	1 318	2 086.6	1 106
Direct government loans, SMEs	EUR million	..	113.7	142.2	141.9	148.3	170.5	235.6	..	..	..	..	..	..	..	..	..
Interest rate, SMEs	%	5.45	5.70	3.01	2.51	2.88	2.32	2.06	2.09	1.83	1.72	1.66	1.60	1.58	1.55	1.57	2.06
Interest rate, large firms	%	4.72	5.05	2.09	1.70	2.22	1.74	1.76	1.77	1.60	1.34	1.40	1.35	1.31	1.40	1.44	1.91
Interest rate spread	% points	0.73	0.65	0.92	0.81	0.66	0.58	0.30	0.32	0.23	0.38	0.26	0.25	0.27	0.15	0.13	0.15
Collateral, SMEs	% of SMEs needing collateral to obtain bank lending	..	..	..	74.30	71.90	78.60	..	..	..	..	..	..	..	..	..	..
Percentage of SME loan applications	SME loan applications/ total number of SMEs	..	..	22.22	26.46	30.20	29.33	29.36	39.33	36.61	36.71	37.18	35.38	33.87	33.07	35.09	33.21
Rejection rate	(SME loans authorised/ requested)	..	..	0.52	5.13	6.44	10.40	10.91	5.88	5.71	6.13	5.07	2.75	3.39	7.62	5.59	6,77
Utilisation rate	SME loans used/ authorised	77.80	79.05	80.69	80.07	80.16	77.45	77.79	79.76	79.62	80.01	79.86	80.39	80.64	80.58	80.09	*
Non-bank finance
Venture and growth capital	EUR million	306.05	385.20	463.93	269.97	291.14	350.79	2451.09	457.12	449.78	691.92	562.91	546.84	853.72	737.14	1526.14	1127.24
Venture and growth capital (growth rate)	%, year-on-year growth rate		26%	20%	-42%	8%	20%	-9%	43%	-2%	54%	-19%	-3%	56%	-14%	107%	-26%
Leasing and hire purchases	EUR million	4405.9	4856.4	3756.4	4005.5	4439.0	4450.2	4121.7	4356.9	4800.5	6009.6	5800.1	668.4	6382	5863	6628	7549
Factoring and invoicing	EUR million	19.2	22.5	23.9	32.2	36.9	42.4	47.7	55.4	61.2	62.8	69.6	76.3	84.8	81.7	99.4	124.2
Other indicators
Payment delays, B2B	Number of days	..	..	17	17	15	19	18	19	13	10	8	9	7	3	12	11
Bankruptcies, total	Number	7 680	8 476	9 420	9 570	10 224	10 587	11 740	10 736	9 762	9 170	9 968	9 878	10 598	7 203	6533	9265
Bankruptcies, total (growth rate)	%, year-on-year growth rate	..	10.36	11.14	1.59	6.83	3.55	10.89	-8.55	-9.07	-6.06	8.77	-0.90	7.29	-32.03	-9.30	41.82
Bankruptcies, SMEs	Number	7 679	8 476	9 418	9 570	10 222	10 583	11 739	10 736	9 760	9 168	9 967	9 878	10 596	7 197	6 532	9 265
Bankruptcies, SMEs (growth rate)	%, year-on-year growth rate		10.39	11.21	1.44	6.94	3.45	10.96	-8.62	-8.90	-6.11	8.77	-0.75	7.17	-32.09	-9,24	41.84

Note: Due to a temporary interruption in bankruptcy statistics from the National Bank of Belgium, the latest data available dates back to 30 November 2021.

Macroeconomic and financing conditions

According to the National Bank of Belgium1, the Belgian economy lost its momentum during the year 2022 but has not fallen into a recession. Like in other countries, the gradual lifting of health measures taken as part of the COVID-19 crisis allowed for a very strong recovery. These reopening effects continued well into 2022, and the strong rebound of market services, which had been most directly affected by health restrictions, was the main driver of growth over the past year.

Industrial activity started the year strongly thanks to the resolution of supply chain problems in the fall of 2021. However, this improvement was interrupted by Russia’s aggression against Ukraine and the economic and financial sanctions taken in its wake. In addition, the increase in the cost of energy and other inputs increasingly eroded the profitability of many companies. This led to a series of companies in certain energy-intensive sectors to reduce or even temporarily stop their production during the second half of the year. As a result, industrial activity contracted from the summer of 2022 onwards, even if the sharp decline in gas prices compared to record levels at the end of August brought some respite.

That being said, gas prices remained significantly higher than before the pandemic. As with the COVID-19 crisis, the impact of the cost increase is heterogeneous: for companies, the determining factors are mainly dependence on gas, labour intensity and market power. the repercussions of the gas price surge were predominantly experienced by sectors heavily reliant on this energy source for their production, with limited short-term alternatives. These sectors primarily include specific branches of the manufacturing industry and retail trade. Furthermore, indexation significantly escalates labor costs for companies, disproportionately impacting those where labor constitutes a substantial component. Lastly, the ability to transfer substantial cost increases to sale prices varies across companies (National Bank of Belgium, 2022).

SMEs in the national economy

In 2022, SMEs dominated the business enterprise landscape in Belgium, accounting for 99.8% of all firms. Micro-enterprises with up to 9 employees constituted 14.3% of all firms, while large enterprises with over 250 employees accounted for only 0.2% of Belgian businesses.

Table 5.2. Distribution of firms in Belgium, 2021

By firm size

Firm size	Number	%
All firms	1.094.607	100
SMEs (0-249)	1.092.955	99.8%
No employees	902.144	82.4%
Micro (1-9)	156.331	14.3%
Small (10-49)	28.752	2.6%
Medium (50-249)	5.728	0.5%
Large (250+)	1.652	0.2%

Source: Statbel, legal units subject to VAT, 2021

SME lending

The National Bank of Belgium (NBB) is currently working on new statistics on business loans established according to the size class of companies, their activity and the region where they operate. For this purpose, it uses modified granular data collected by the Business Credit Register. In the meantime, the data series will no longer be fed. The latest available data dates back to 30/11/2021.

SME statistics on lending consider non-financial corporations that filed annual accounts at least once in the last 60 months, i.e. corporations for which size-related variables are available. Non-financial corporations are classified on the basis of their annual accounts as follows:

• Small companies: those having deposited an abbreviated or a micro model.

• Medium-sized companies: those having deposited a full model but whose turnover does not exceed EUR 45 000 000 over two consecutive years.

• Large companies: those having filed a full model and having a turnover of more than EUR 45 000 000 for two consecutive years.

Outstanding business loans to SMEs increased by a cumulative 38% over 2011-2021. However, lending to SMEs declined slightly in 2013 and fell 8% in 2014. From 2016 to 2021, outstanding loans to SMEs expanded 27.8% to EUR 138 billion. Finally, the growth of this credit category amounts in 2021 to 3% compared to the previous year. The slowdown of the upward trend can be notably explained by the global economic context in connection with the COVID-19 crisis.

Developments in outstanding loans to enterprises follow a similar trend to those in total outstanding loans to SMEs, except for 2016, when growth in total outstanding loans dipped by 0.75% before bouncing back 6.2% in 2017. Outstanding loans to enterprises totalled to EUR 201.8 billion in 2021. At 68.41% in 2021, the share of SME loans in total outstanding loans is the highest since 2007. On average, this indicator amounts to 65% over the whole reference period (2007-2021).

Credit conditions

The average interest rate granted to SMEs has gradually decreased from 2.51% in 2010 to 1.55% in 2020 before bouncing back sharply to 2.06% in 2022. A similar trend can be observed for large firms. The increase in interest rates has been driven by global economic recovery following the COVID-19 crisis. This led central banks to accelerate monetary policy normalization in order to act against rising inflation.

Although interest rates charged to small firms remain systematically higher than rates charged to large corporations, the spread between SMEs and large corporation rates has steadily declined. In 2008, the interest rate spread stood at 65 basis points, which subsequently narrowed to 27 basis points by 2019, and further reduced to just 15 basis points by 2022 (a slight increase from the 13 basis points recorded in 2021).

According to the National Bank of Belgium, the factors accounting for the systematic decline in the interest rate spread until 2021 include the following: From late 2013 to mid-2018, a series of reductions in benchmark interest rates and other elements of monetary policy played a significant role in prompting banks to relax their credit approval criteria. Additionally, the economic upturn witnessed in 2014 and 2015 led to a reevaluation of credit risk, resulting in a decrease. Lastly, surveys conducted among banks primarily reveal an increase in competitive pressures between 2015 and 2018, motivating them to offer more advantageous credit terms to borrowers2. Although interest rates increased from 2020, the spread between small and large companies only started to widen from 2022.

In its quarterly Bank Lending Survey, the European Central Bank summarizes changes in loan requirements from the main financial institutions. The survey highlights a general tightening of lending conditions in 2008-09, as well as in 2012. Credit conditions eased throughout the Euro area, and especially in Belgium from 2013 to 2018. However, a gradual deterioration in credit conditions for SMEs has been reported since the fourth quarter of 2018.

Figure 5.1. Changes in credit standards for SMEs in Belgium and the Euro zone

Source: National Bank of Belgium, ECB – Bank Lending Survey

Statlink

Alternative sources of SME financing

Leasing

Leasing and factoring are two substantial sources of funding for Belgian ventures. In 2019, total leasing production amounted to EUR 6 382.4 million, representing 8.1% of gross fixed capital formation. However, in 2020, total leasing production decreased by 8.14% to EUR 5 863 million, partly due to the COVID-19 crisis. In 2022, total leasing production grew to EUR 7 549.4 million, surpassing the levels registered prior to the pandemic, and representing a 13.9% increase from the previous year. High inflation which pushed up asset prices and the announcement of a number of tax changes for vehicles supported this strong growth.

Factoring

Factoring turnover grew consistently during the reference period from 2012 to 2022 and increased by 52% since 2020. In 2022, factoring turnover amounted to EUR 124 166 million, representing a year-on-year increase of 25%. Factoring has continued to contribute to GDP, accounting for 22.6% of GDP in 2022, against only 11% of GDP in 2012. This significant increase can be attributed to the potential decline it experienced in 2020 as a result of the COVID-19 pandemic, followed by robust developments in the last two years.

Table 5.3. Total leasing production and factoring volumes in Belgium

In EUR million

	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Non-real estate leasing (financial and operational)	4 087.9	3 683.4	3 765.5	4 184.9	5 116.4	5 020.7	5366.7	5657.2	5137.4	5803.7	6812.8
Real estate leasing	362.3	438.3	591.4	615.5	893.3	779.3	701.7	725.2	725.6	824	736.6.
Total production	4 450.2	4 121.7	4 356.9	4 800.5	6 009.6	5 800.1	6068.4	6382.4	5863	6627.7	7549.4
Year-on-year growth, %	0.3	-7.4	5.7	10.2	25.2	-3.49	4.63	5.17	-8.14	13	13.9
Gross fixed capital formation	59530.2	58833.1	61258.2	65053.4	68851.7	71218.8	73922.1	79036.3	75207.8	81101.9	88365.5
Relative importance of leasing in capital formation	7.5	7.0	7.1	7.4	8.7	8.1	8.2	8.1	7.8	8.2	8.5
Non-real estate leasing	8 531.8	8 613.7	8 729.9	9 179.7	9 845.4	10 188.2	11 132.4	12333,9	12740,7	13191.6	14312.2
Real estate leasing	4 123.7	4 170.2	4 269.9	4 326.9	4 713.5	4 930.7	5041.2	5206,8	4849,2	4764.5	4793.4
Outstanding stock of leasing (end of year)	12 655.5	12 783.9	12 999.8	13 506.6	14 558.9	15 118.9	16 173.6	17540,7	17589,9	17956.1	19105.5
Factoring turnover (domestic and international)	42 352	47 684	55 374	61 169	62 846	69 641	76 340	84 818	81 716	99.368	124 166
Year-on-year growth, %	14.9	12.6	16.1	10.5	2.7	10.8	9.6	11.1	-3.7	21.6	25
GDP	386174.7	392880	403003.3	416701.4	430085.3	445050.1	460050.8	478676.1	459827.4	502521.1	549456.2
Factoring as a proportion of GDP	11.0	12.1	13.7	14.7	14.6	15.6	16.6	17.7	17.8	19.8	22.6

Source: BLV-ABL, EUF Factoring & Commercial Finance.

Venture Capital and growth capital

In Belgium, venture capital and its various sub-segments display significant variation on a yearly basis. This volatility can be explained, among other factors, by the limited number of registered transactions for this type of financing. As such, venture capital is highly sensitive to extreme swings.

Total investment in venture capital and growth capital amount to EUR 1 127.24 million in 2022. Although this represents a fall of 26% on an annual basis, it is still the second-highest value after 2021 over the reference period (2012 - 2022).

• Seed capital investments, which are typically the first capital investments made into companies, reached a total of EUR 20.76 million in 2022. While this reflects a 2.3% increase from the previous year’s EUR 20.30 million, it still represents an 18.6% decline from the 2020 figure of EUR 25.51 million. In 2015, there was no investment in this category, making it an outlier year.

• Start-up capital investments totalled EUR 190.7 million, representing a decline of 39.8% on an annual basis and an 18.9% decline from the 2020 figure of EUR 235.23 million. This is the lowest amount recorded since 2018

• In contrast to other categories, later-stage financing experienced a significant increase of 126% year-on-year, reaching a total of EUR 213.5 million. This growth is part of a broader trend, with later-stage financing demonstrating considerable expansion over the past three years. This increase can be partially attributed to the number of companies that have raised funds in this financing category. Their count has thus risen from 28 in 2019 to 42 in 2022.

• Growth Capital declined 36% in 2022, falling to EUR 702.5 million. Despite this decrease, the amount remains higher than the average of EUR 451 million for the reference period.

• Total private equity decreased by 38% in 2022 and amounted to EUR 2 772.82 million. The annual average total investment in private equity was EUR 1 899,9 million for the period under review.

Table 5.4. Venture capital investments in Belgium

In EUR million

Stage	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Seed	2.25	1.38	4.28	0	12.45	45.43	42.99	23.2	25.51	20.30	20.76
Start-up	57.77	61.59	58.1	65.25	57.19	85.24	200.36	289.14	235.23	316.84	190.71
Later Stage Venture	34.55	55.81	61.36	33.15	81.58	73.6	47.31	41.26	107.16	94.21	213.51
Total venture	94.57	118.78	123.73	98.4	151.22	204.27	290.67	353.58	367.90	431.35	424.99
Growth capital	256.21	200.53	333.39	351.39	540.7	358.63	256.17	500.13	369.24	1 094.79	702.25
Venture and growth Capital	350,79	319,31	457,12	449,78	691,92	562,91	546,85	853,72	737,15	1526,14	1127,24
Rescue/Turnaround	11.94	1.25	0.18	9.77	1.38	0	0.65	0.34	19.95	7.75	4.00
Replacement capital3	36.43	40.82	17.95	9.14	8.04	6.5	0	8.43	10.25	12.17	13.91
Buyout	1066.24	451.08	610.62	1373.94	626.43	1352.26	1486.03	898.15	645.34	2 917.71	1 627.67
All private equity	1465.39	812.47	1085.87	1842.64	1327.77	1921.67	2033.53	1760.64	1 412.68	4 463.77	2 772.82

Source: Invest Europe, Investments: market statistics.

Figure 5.2. Sectoral breakdown of venture capital and all private equity in Belgium, 2022

Source: Invest Europe, Investments: market statistics.

Statlink

The chart above shows a sectoral breakdown of venture capital and total private equity in Belgium. In 2022, venture capital activity in Belgium was mainly focused on ICT and biotech. The ICT and biotech sectors captured respectively 38.1% and 32.4% of venture capital investments in 2022.

The other sectors benefiting from venture capital investments are, in decreasing order: consumer goods (7.3%), business products (6.8%), energy (6.6%) and transportation (3.9%).

The business products sector stands out in terms of the total amount of private equity investments. Although this sector attracts a smaller proportion of venture capital, it does attract a substantial proportion of growth and buyout capital. In 2022, the business products sector attracted 30.2% of all private equity investments, amounting to EUR 837 million.

Among the other sectors attracting a substantial part of all private equity funds we find the construction sector with a share of 12.1% (EUR 335 million), and the agricultural sector with a share of 1.6% (EUR 45 million).

Other indicators

Payment delays

Intrum Justitia publishes an annual survey aimed at assessing payment delays in Europe. Average payment delays in Belgium for the B2B segment were 11 days in 2022. This is one day less than in 2021, but still a considerable increase compared with the payment delays observed over the 2017-2020 period, which were less than 10 days.

Bankruptcies

In 2022, the total number of bankruptcies reached 9 265, representing a significant increase of 41.8% compared to the previous year. This sharp rise can be attributed to the expiration of various support measures that were implemented by federal and regional governments to assist businesses during the COVID-19 crisis. Despite the recent increase, the number of bankruptcies in 2022 remains lower than the figures recorded during the pre-Covid period from 2017 to 2019.

Developments in SME bankruptcies, or bankruptcies of enterprises with less than 50 employees, follow a similar trend and amounted to 9 246 bankruptcies in 2022. this figure is also lower than the number of bankruptcies recorded over the 2017-2019 period for SMEs4.

Government policy response

Regional segmentation

Public initiatives in the field of SME finance translate into federal and regional programmes. Guarantee programmes protect the collateral pledged by entrepreneurs and SMEs. They also provide a safety net for bankers willing to accept loan applications from borrowers deemed to have insufficient collateral for traditional loans, which is typically one of the main reasons underlying credit denials.

Following the regionalization of the "Fonds de participation" on 1 July 2014, the administration of loans and public guarantees is being dealt with by the regions. The criteria for granting loans and guarantees are likely to diverge depending on regional priorities.

Table 5.5. Regional segmentation of financial support to SMEs in Belgium

Indicator	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
Brussels-Capital Region
Government loan guarantees, SMEs	12.5	9.4	8.3	8.4	12.3	26.5	15.5	11.6	12.2	15.4	11.7
Government guaranteed loans, SMEs	26.1	17.5	14.9	16.0	19.2	40.1	28.6	19.8	24.2	28.8	23.1
Direct government loans, SMEs	8.3	6.3	..	..	..	..	..	..	..	..	..
Walloon Region
Government loan guarantees, SMEs	67.0	68.0	80.5	93.0	111.1	130.4	143.0	160.2	214.1	188.9	181.1
Government guaranteed loans, SMEs	163.2	166.0	189.8	228.3	246.6	286.5	308.6	356.7	421.0	376.2	381.3
Direct government loans, SMEs	132.3	186.5	206.5	200.3	195.6	197.4	227.9	171.8	307.9	390.0	479.3
Flemish region
Government loan guarantees, SMEs	186.5	402.8	176.8	346.8	275.0	301.5	453.8	348.2	550.6	817.1	376.6
Government guaranteed loans, SMEs	295.0	642.6	272.1	561.3	470.1	501.7	793.0	616.2	873.0	168.1	701.7
Direct government loans, SMEs	29.9	42.8	37.1	50.4	83.5	62.2	63.1	64.0	171.0	147.9	101.2
Belgium total
Government loan guarantees, SMEs	266.0	480.2	265.6	448.2	398.3	458.4	612.2	520.0	777.0	1 021.5	569.4
Government guaranteed loans, SMEs	484.3	826.1	476.8	805.6	735.9	828.3	1 130.3	993.0	1 318.1	2 086.6	1 106
Direct government loans, SMEs	170.5	235.6	..	..	..	..	..	..	..	..	..

Source: PMV, Finance & Invest.Brussels, Wallonie Entreprendre

Policy Measures

Flemish Region

The “Doorbraaklening” or “Breakthrough loan”

The “Doorbraaklening” or “Breakthrough loan” program started in February/March 2022. The objective of the program is to accelerate the roll-out of ambitious investment projects around digital transformation, sustainability transition, and internationalisation. The program is funded by LRM (Limburg Investment Company) and delivered by LRM in cooperation with VLAIO Team Bedrijfstrajecten and UHasselt.

Companies wanting to become more sustainable, digitalise or internationalise can apply for the Breakthrough loan. Ambitious SMEs will be offered business financing that combines risk capital and subsidies. This mixed form of financing is quite unique. The Breakthrough loan is aimed at strong and intrinsically healthy small and medium-sized enterprises (SMEs) going through a validated VLAIO subsidy process in the context of sustainability, digitalisation or internationalisation. VLAIO guides such companies towards public funding and innovation support. The combination with flanking risk capital from the Limburg Investment Company LRM can accelerate the roll-out of ambitious investment projects around digital transformation, sustainability transition, and internationalisation.

The financing terms include a ticket size of EUR 50 000 to EUR 250 000 and a duration of 2 to 8 years. During the first 3 years, no capital repayments can be allowed. The interest rate is fixed at 4%. “Breakthrough companies” can count on active guidance from the project partners.

A budget of EUR 5 million has been foreseen for the programme. A few months after its launch (in May 2022), this loan mechanism already reached the EUR2 million mark. About a dozen SMEs got the chance to further develop ambitious projects - with a focus on internationalisation, digitalisation or sustainability - through this loan. The Breakthrough loan is an innovation in the financing landscape. There are no comparable instruments around mixed financing in a business context in Flanders. So UHasselt has set up a research project to analyse the investment processes within companies and to take stock of its social impact. The findings will finally be translated into policy recommendations for a broader roll-out of this form of financing in Flanders.

The “Overbruggingslening” or “Bridging loan”5

The “Overbruggingslening” or “Bridging loan” started in February 2022 and is set to end on December 15th, 2023. The objective of the programme is to provide support for Flemish companies facing liquidity needs following the the Ukraine crisis, and the energy crisis. The programme is funded by the regional budget and delivered by VLAIO.

Flemish companies (including those active in agriculture, horticulture, fisheries, and aquaculture) with acute liquidity needs resulting from rising energy costs, the overall increase in the price levels or other impacts from the war in Ukraine, are eligible for the Bridging loan.

The financing terms have been adjusted several times according to the crisis for which the instrument was deployed. The terms currently applicable include a minimum loan amount of EUR10,000 and a maximum amount of EUR2 million. The maximum loan amount is limited to 15% of the average annual turnover of 3 calendar years prior to the application. For repayment of the loan, there is a choice between 3 years and 5 years with an adjusted interest rate. Capital repayment is made monthly, in equal instalments, after an exempt period of 24 months. Repayment of interest is made monthly with no exempted period for interest repayment. A total of three loans within the maximum loan amount can be granted to an aid applicant. The number of loans includes any bridging loans already granted that could be applied for between February 28th and June 15th, 2022 and between August 1st and December 15th, 2022. For bridging loans applied for from April 1st, 2023, the interest rate has changed. For SMEs, an annualised interest rate ranging from 3.56% to 4.06% depending of the size of the company and the repayment period will apply from then on. For big companies, the annualised interest rate will amount to 4.06% or 5.06%. On July 1st and October 1st, 2023, the minister will update the interest rate again.

VLAIO has already awarded more than 2 000 bridging loans corresponding to a total amount of around EUR 250 million.

Brussels-Capital Region

Prêts Energy&Reno

The “Prêts Energy&Reno” started on November 1st, 2022 and has no specified end date. The objective of the programme is to support the energy transition of Brussels companies by reducing and optimising their energy consumption. Energy&Reno is a financing program aimed at self-employed individuals and small businesses that invest in energy efficiency. This financing should enable small businesses and self-employed individuals in Brussels to invest in energy-efficient equipment on their business sites, such as photovoltaic panels, high-performance glazing, and more efficient equipment.

The program is funded by the Brussels-Capital Region and delivered by Brusoc (a subsidiary offinance&invest.brussels). Self-employed individuals and small businesses located in the Brussels-Capital Region are eligible for the program.

The financing terms include a loan amount between EUR 10,000 and EUR 150,000 at a minimum rate of 2% updated. The loan must be repaid within 7 years with the possibility of granting a capital exemption of up to 24 months (included in the 7 years). The loans are unsecured. The actual cost of the programme is EUR 2.5 million (budget that can be revised upwards if needed).

Transition Fund

The “Fonds de transition” or “Transition Fund” programme started in September 2022. The objective of the programme is to finance companies that need to transform their business model and/or production lines in order to meet regional/European environmental and climate objectives.

The programme is funded by the Brussels-Capital Region and delivered by finance&invest.brussels. Eligible companies include those wishing to reduce the ecological footprint of their activities by making investments related to the following themes: transition to clean or climate-neutral mobility; energy efficiency; production, transport, storage, distribution or use of renewable energies; circular economy; and process optimisation in the fields of water, energy, and materials. Also eligible are companies that develop solutions to help other companies reduce their greenhouse gas emissions.

The financing terms include amounts ranging from EUR80,000 to EUR 1,500,000 through loans, bank co-financing, quasi-equity debt or minority equity stakes in companies. The actual cost of the program is EUR10 million.

Reform of the Brussels Guarantee Fund

Reform of the Brussels Guarantee Fund program started on June 1st, 2022. The objective of the programme is to improve access to financing for all SMEs by facilitating access to the guarantee of the Brussels Guarantee Fund and encouraging the economic transition of SMEs. The Brussels Guarantee Fund has undergone a major reform to automate a large part of the guarantees granted. In addition, guarantees are now increased for SMEs with social and/or environmental added value.

The programme is funded by the Brussels-Capital Region and delivered by the Brussels Guarantee Fund.

The financing terms include a guarantee rate of 65% for amortizable loans and 50% for non-amortizable loans. In addition, an increase in the guarantee up to 80% is provided for companies with societal added value (environmental and/or social). The actual cost of the program is estimated at around EUR 3 million per year in claims.

Recapitalisation of finance&invest.brussels

The recapitalisation of finance&invest.brussels started in December 2020. The recapitalization amounts to EUR 131.1 million (2/3 charged to the Region). Calls for funds from shareholders are made according to needs. At this stage, half of this additional capital has been called (i.e. EUR 65.5 million).

The objective of this recapitalisation is to provide finance&invest.brussels with the means to properly finance Brussels companies and increase the size of tickets (among other things, in order to reach larger companies). This recapitalisation has been combined with the adoption of a new investment strategy. This strategy should enable finance&invest.brussels to become a European reference in terms of economic transition towards exemplary economic models in terms of social and environmental aspects. This strategy is based on two pillars: a) the definition of investment themes that are part of the economic transition and that take into account the Brussels socio-economic fabric; b) the definition of investment criteria: All funding request submitted by Brussels companies (regardless of the investment theme) will be evaluated against three types of criteria: exclusion criteria, financial performance, and positive impact in terms of social and environmental aspects.

The programme is funded by the Brussels-Capital Region (for 2/3 of the total amount of the recapitalisation) and delivered by finance&invest.brussels. All Brussels companies are eligible for the programme.

The financing terms include loans (convertible or not, subordinated) and equity stakes up to EUR5 million. The actual cost allows finance&invest.brussels to finance Brussels companies up to around EUR50 million per year.

Recapitalisation of Brusoc and Brustart

The recapitalisation of Brusoc and Brustart started in December 2021. Brusoc (a subsidiary of finance&invest.brussels specialised in financing small businesses and social enterprises) and Brustart (a subsidiary of finance&invest.brussels specialized in financing young innovative companies - seed and pre-seed financing) are being recapitalised to the tune of EUR15 million and EUR5 million respectively. The funds investedare gradually being used by Brusoc and Brustart.

The objective of this recapitalisation is to enable Brusoc and Brustart to finance their target audience to the extent of their needs. The programme is funded by the Brussels-Capital Region and delivered by finance&invest.brussels.

The financing terms include loans (convertible or not, subordinated or not) and equity stakes up to EUR250k (less at Brustart). The actual amount allows Brusoc to finance small businesses and social enterprises up to around EUR9 million per year.

“Prêt proxi” or “Proxi loan”

The “Prêt proxi” or “Proxi loan” programme started in October 2020. The objective of the program is to mobilize private (citizen) savings for the financing of SMEs through the granting of a tax credit on one or more loans granted by a taxpayer to an SME. The program is funded by the Brussels-Capital Region and delivered by the Brussels Guarantee Fund (note: this is a citizen loan, the Brussels Guarantee Fund is only an intermediary).

SMEs are eligible for the programme. The financing terms include a maximum loan term of 8 years and a maximum loan amount of EUR250,000 per company. If the company is unable to repay its loan, a regional guarantee of 30% of the remaining balance due is provided. From 2024, the regional guarantee will increase from 30% to 50% for exemplary projects in terms of social and environmental aspects.

The actual cost of the program is around EUR2 million per year in financing granted under the Proxi loan. According to the latest annual report from finance&invest.brussels, the key figures for the Proxi Loan are as follows: EUR 2,234,150 raised by 766 lenders in support of 57 companies as of 2022.

boosting.brussels

The participation in the regional fund « boosting.brussels » program started in December 2021. The Brussels-Capital Region participates in the capital of boosting.brussels. This fund is EUR 80 million and the Region participates to the tune of EUR20 million. A first tranche of EUR5 million has been released. The balance is released according to the fund’s calls.

The objective of boosting.brussels is to improve the solvency of companies following the COVID-19 and energy crises. The programme is funded by the Brussels-Capital Region (among others, see above) and delivered by finance&invest.brussels.

The financing terms include subordinated loans up to EUR5 million.

Support for credit cooperatives

The “Soutien aux coopératives de crédit” or “Support for credit cooperatives” programme started in June 2023. The objective of the programme is to support credit cooperatives by granting a tax advantage to citizens who acquire shares in credit cooperatives. In turn, credit cooperatives will grant loans to a network of companies that often do not have access to traditional banking channels but still contribute to our economy and society. The programme is funded by the Brussels-Capital Region.

Walloon region

Business Voucher “Digital Recovery”

The “Chèque-Entreprise « Relance par le numérique »” or “Business Voucher « Digital Recovery »” program in Wallonia started in November 2022 and is set to end on August 31st, 2023. The objective of the programme is to help SMEs boost their digitalisation, online activities, and cybersecurity. The programme is funded by EU funds and delivered by public administrations and the “Agence du Numérique”.

Eligible entities include Walloon SMEs, Walloon self-employed individuals, and non-profit organizations with an economic vocation subject to VAT and employing at least one person) that will be integrated into the system in the spring. This is an important difference compared to the classic eligibility criteria for business vouchers which are not intended for nonprofits.

Public intervention amounts to 90% of the amounts concerned with variable ceilings for each phase, for a total amount of subsidies of EUR 15,000.

The financing terms include a total budget of EUR20 million. After the diagnosis stage and development of a strategic action plan, it will be possible to deploy the necessary and adequate digital tools with an intervention rate of 90%. 90% of the provider’s invoice is covered by the check. To support as many companies as possible, ceilings are provided: for the diagnosis, the public intervention is limited to EUR1,900 excluding VAT; for the action plan, public intervention may be a maximum of EUR5,700 excluding VAT; for implementation and investments, the maximum amount of public intervention is EUR7,400 excluding VAT.

Extension of the « Helping Hand » loan

The extension of the « Helping Hand » loan or prêt « Coup de Pouce » programme started in 2022 and is set to end in 2024. The objective of the program is to mobilise private citizen savings for SMEs through a tax-efficient loan mechanism. The programme is funded by a tax benefit at the regional level and delivered by the regional fiscal administration (and Wallonie Entreprendre if combined with a subordinated loan).

Any type of company can be a borrower and private citizens can be lenders. The financing terms include EUR250,000 per borrower, EUR100,000 per lender, and the duration of the loan may be 4, 6, 8 or 10 years. An annual tax credit amounting to 4% for the first four years and then 2.5% for any subsequent years is provided.

Two options are now available: either to repay the entire capital in one go at the end of the loan term or to choose an amortizing loan with quarterly, half-yearly or annual capital repayments (as desired) over the term; early repayment is now also accepted. The scheme provides for a 30% repayment guarantee from the Region. This loan can now be completed with a subordinated loan from Wallonie Entreprendre of an identical amount and duration.

Nearly 5 155 SMEs and self-employed individuals have benefited from the program, representing a total investment amount of EUR38 million.

Aid for companies in the context of the energy crisis

The objective of the programme is to support companies facing rising energy costs. The programme is funded by the regional budget and delivered by the Walloon Region authority.

Eligible companies include non-energy-intensive companies (within the meaning of the temporary framework), energy-intensive companies (when the purchase of energy products reaches at least 3% of the production value), and very energy-intensive companies (e.g. companies producing aluminum, fiberglass, paper pulp, fertilizer or hydrogen, chemicals).

A budget of EUR175 million has been released to set up direct aid for companies affected by the sharp rise in energy prices. The aid is granted for the 4th quarter of 2022 as well as for the 1st quarter of 2023. The intervention percentage is calculated based on the difference between the invoice for the period concerned (the quarter) and twice the invoice for the corresponding period of the previous year.

This measure is included in a budget of EUR505 million that has been set aside by the Walloon Government to support companies facing the full brunt of the energy crisis.

Carbon Leakage Indirect

The “Carbon Leakage Indirect” programme started on December 21st, 2022. The objective of the programme is to partially offset the cost of the community system of carbon quotas incorporated in the price of electricity. The programme is funded by regional funds and delivered by SPW Economy, Employment, Research - Investment Programs Department.

Any company with a production headquarters in Wallonia in one of the targeted sectors or sub-sectors is eligible for the programme. The financing terms include a total budget of EUR30 million.

This measure is included in a budget of EUR505 million that has been set aside by the Walloon Government to support companies facing the full brunt of the energy crisis.

Federal government

Droit passerelle energie (Energy bridge right)

Self-employed workers who are experiencing difficulties following the energy crisis can apply for various measures. One of these measures is the “droit passerelle” (bridge right). This consists of financial aid for up to 12 months and the preservation of healthcare and disability benefits for up to 4 quarters without paying contributions. The “droit passerelle” can be granted in case of forced interruption or cessation due to a decision by a third-party economic actor or an event with an economic impact that directly and significantly affects the activity.

The increase in energy prices leading to a significant increase in the cost of energy in total production costs/professional expenses is considered an event with an economic impact. Self-employed workers, helpers and assisting spouses who decide to interrupt or cease their independent activity because it is less profitable due to the increase in energy prices can therefore benefit from the “droit passerelle”. It must be a complete interruption of all professional activity for at least 7 consecutive calendar days. To apply for the “droit passerelle”, one must provide a detailed motivation for your request and explain why the significant increase in production costs/professional expenses due to the energy crisis led to an interruption or cessation of your independent activity. It is required to include supporting documents with the application. These documents must reasonably demonstrate the impact of the energy crisis on one’s production costs/professional expenses and a significant increase in one’s provisions for your 2022 and/or 2023 energy bill compared to 2021. In the absence of these supporting documents, the application will be inadmissible.

The indexed amounts as of July 1, 2023 varies for different durations of interruption. For an interruption of 28 days or more, the amount is EUR 1929.19 with family charges and EUR 1543.84 without family charges. For an interruption between 21 and 27 days, the amount is EUR 1486.89 with family charges and EUR 1157.88 without family charges. The amounts decrease as the duration of the interruption decreases, with no payment for an interruption of less than 7 days.

Figure 5.3. Trends in SME and entrepreneurship finance in Belgium

Source: See Table 5.1

Statlink

Table 5.6. Sources and definitions of Belgium’s Scoreboard

Indicator	Definition	Source
Debt
Outstanding business loans, SMEs	Credit granted to resident non-financial corporations according to the Central Corporate Credit Register (credit facilities opened), sum of small and medium enterprises	National Bank of Belgium
Outstanding business loans, total	Credit granted to resident non-financial corporations according to the Central Corporate Credit Register (credit facilities opened), sum of small, medium and large enterprises	National Bank of Belgium
Share of SME outstanding loans		National Bank of Belgium
Outstanding short-term loans, SMEs	Credit granted to non-financial corporations (Consolidated balance sheet of credit institutions - Scheme A) - outstanding amount, up to one year	National Bank of Belgium
Outstanding long-term loans, SMEs	Credit granted to non-financial corporations (Consolidated balance sheet of credit institutions - Scheme A) - outstanding amount, up to one year	National Bank of Belgium
Share of short-term SME lending	..	National Bank of Belgium
Government loan guarantees, SMEs	..	Regions
Government guaranteed loans, SMEs	..	Regions
Direct government loans, SMEs	..	Regions
Interest rate, SMEs	Loans (other than bank overdraft) - up to EUR 1 million - floating rate and up to one year initial rate fixation	National Bank of Belgium - MIR
Interest rate, large firms	Loans (other than bank overdraft) - over EUR 1 million - floating rate and up to one year initial rate fixation	National Bank of Belgium - MIR
Interest rate spread		National Bank of Belgium - MIR
Percentage of SME loan applications	..	ECB Safe Survey
Rejection rate	..	ECB Safe Survey
Utilisation rate	SME loans used / SME loans utilized - Central Corporate Credit Register	National Bank of Belgium
Non-bank finance
Venture and growth capital	Investments - market statistics (by country of portfolio company)	Invest Europe
Venture and growth capital (growth rate)	Investments - market statistics (by country of portfolio company)	Invest Europe
Leasing and hire purchases	BLV - ABL	BLV - ABL – Annual Report 2022
Factoring and invoice discounting	Total factoring volume	EU Federation - Factoring and Commercial Finance
Other indicators
Payment delays, B2B	Average time for actual payment - average payment terms allowed to customers	Intrum Justitia - European Payment Report 2022
Bankruptcies, total and SMEs	Data from commercial court	FPS Economy
Bankruptcies, total and SMEs (growth rate)	Data from commercial court	FPS Economy

References

BLV-ABL – Association belge de Leasing, Annual Report 2022, p. 33, 40

http://www.blv-abl.be/fr/concernant-labl/rapport-annuel

ECB, ECB Statistical Data Warehouse, Safe Survey

https://sdw.ecb.europa.eu

EU Federation – Factoring and Commercial Finance, EUF Statistics, 8 june 2023

https://euf.eu.com/total-factoring.html

FPS Economy, Statistics Belgium, BeStat

https://bestat.statbel.fgov.be/bestat/index.xhtml

SPW, Wallonie Entreprendre, indicators and policy measures for the Walloon region

https://www.wallonie-entreprendre.be/

SPRB, Finance&Invest.brussels, indicators and policy measures for the Brussels-Capital Region

https://www.finance.brussels/

EWI Vlaanderen, indicators and policy measures for the Flemish region

https://www.ewi-vlaanderen.be/

Intrum Justicia, European Payment Report 2022, p.28

https://www.intrum.com/publications/european-payment-report/

Invest Europe, European Private Equity Activity Data 2022

https://www.investeurope.eu/

National Bank of Belgium, National Bank of Belgium Online Statistics, Central Corporate Credit Register

https://stat.nbb.be

National Bank of Belgium, National Bank of Belgium Online Statistics, Monthly Business Survey

https://stat.nbb.be

National Bank of Belgium, Report 2022 - Economic and financial developments

https://www.nbb.be/en/articles/report-2022-economic-and-financial-developments

Piette, Ch., Zachary, M.-D., Financement bancaire aux PME de 2014 à 2019 : effet des changements législatifs sur l’octroi de crédits, Revue économique, juin 2020

https://www.nbb.be/fr/articles/financement-bancaire-aux-pme-de-2014-2019-effet-des-changements-legislatifs-sur-loctroi-de

SPF Economie, PME et Indépendants en chiffres

https://economie.fgov.be/fr/themes/entreprises/pme-et-independants-en

Notes

← 1.  National Bank of Belgium, Report 2022 - Preamble Economic and financial developments Prudential regulation and supervision

← 2.  Piette, Ch., Zachary, M.-D., Financement bancaire aux PME de 2014 à 2019 : effet des changements législatifs sur l’octroi de crédits, Revue économique, juin 2020

← 3.  Invest Europe define “replacement capital” as Minority stake purchase from another private equity investment organisation or from another shareholder or shareholders.

← 4.  https://economie.fgov.be/fr/themes/entreprises/pme-et-independants-en/pme-faillites-et-pertes

← 5.  A version of the programme was rolled out after the COVID-19 crisis, although this version has already been phased out.