Cofinancing

Cofinancing is intended for companies, self-employed or liberal professionals with existing activities or starting up their activities.

A trainee in the exercise of a liberal profession is also eligible for Cofinancing when establishing as a self-employed person in main occupation.

A student self-employed person is the only status that does not need to be established as a self-employed person in main occupation to be eligible for a Cofinancing.

The applicant resides or has a registered office in the Flemish Region. If the starter’s residence or registered office is not in the Flemish Region, but the financed activities have a clear added value for Flanders, PMV can still consider the credit application.

The company meets the European SME definition.

A non-profit association (VZW) only qualifies for Cofinancing if it performs an economic activity.

Would you like to know whether you are eligible for Cofinancing? Then take a look at the handy checklists below.

Cofinancing is intended to finance tangible, intangible and financial investments, as well as working capital needs at the start-up or expansion of the
activity.

Cofinancing can only be used for new investments (including replacement investments, second-hand equipment) but not for refinancing existing commitments with credit institutions, nor for refinancing or payment of other existing debts, whether overdue or not. An outstanding debt less than 3 months old at the time of receiving the application is not considered an existing debt.

Certain activities are excluded for funding. Check the checklist below to see if your activity is excluded.

Certain purposes are excluded for funding. Check in the checklist below whether the purpose of your financing is excluded.

Amount

The maximum amount of Cofinancing is equal to the smallest of the following amounts:

• 4 times the own effort
• 50 % of the total funding requirement
• 350,000 euros

The own effort or own contribution is the personal cash share of the applicant in the financing of the investment project to be realised. A contribution in kind can be accepted, provided the assets were acquired with own funds maximum 6 months before receiving the application. These investments must be adequately documented.

The own contribution may not be borrowed and must be at least 10% of the total financing requirement. The minimum solvency after investment is 10%.

20% of the total financing requirement must be met by an approved co-financier. The funds provided by the co-financier must be long-term (minimum 2 years). Short-term financing, such as a cash credit, does not qualify as Cofinancing.

Term

The duration of a Cofinancing is minimum 3 and maximum 10 years.

Fixed interest rate

The interest rate is fixed and is currently 3% per year.

Repayment

Interest payments and repayments of capital are made by fixed monthly repayments.

By default, there is an exemption from capital repayments during the first year after withdrawal. Subject to substantiation, the period of exemption from capital repayments can be extended to two years. In this case, the fixed interest rate is increased by 0.25% to 3.25%.

In the case of financing of acquisitions or with the intervention of business angels who are members of or screened by a recognised business angel network, the period of exemption from capital can be extended to three years. In this case, the fixed interest rate is increased by 0.50% to 3.50%.

Subordinate nature

The Cofinancing is subordinated to all credits from financial institutions. In case of payment problems or bankruptcy, the Cofinancing is only repaid after all bank credits have been repaid. Banks therefore consider the Cofinancing as an expansion of equity and a strengthening of your company’s solvency.

Guarantees

Cofinancing requires exceptional guarantees. The possible guarantees are determined in function of the credit risk and concern only the elements relating to the project.

If guarantees are requested, care is taken to minimise their cost to the customer (for example: a mortgage mandate instead of a mortgage subscription). Solidarity guarantees are limited to the guarantees of the active partners.

Combination with a Start Loan

Cofinancing can be combined with a Start Loan (or vice versa) provided a valid Start Loan certificate can be presented, the combined amount of all loans does not exceed 350,000 euros and a minimum own effort amounting to at least 10% of the total investment requirement.

Innovative starters and very young companies with innovative or technological activities often have a hard time finding financing, even at PMV. With a Cofinancing for innovative start-ups, PMV wants to give them easier access to funding, in a smooth way, within a clear agreement framework.

Because they do not yet have realised or positive cash flows, and therefore have no immediate repayment capacity, innovative or technological start-ups often cannot resort to traditional bank financing. Nevertheless, for their financing, they usually prefer a loan to a capital contribution: not only do they lose part of their own company through a capital participation, but the procedure to obtain a loan is also much simpler.

Yet refusal or conditions

PMV co-financing is an interesting option in these cases, in combination with the financial support of venture capital funds, business angels or other investors. But even when applying for Cofinancing, quite a few files were refused or had more conditions imposed on them: guarantees, the contribution of additional capital, disbursement subject to meeting targets…

Clear criteria, smooth allocation

Nevertheless, PMV wants to help young, innovative and promising companies get financing in a smooth way, despite their high risk profile. We have therefore created a separate form of Cofinancing for start-up, innovative companies who don’t have positive cash flows today, but who can demonstrate repayment capacity in the future based on a realistic and substantiated business plan. Here are the features:

• a maximum loan amount of €150,000;
• an own contribution in the form of (quasi-)capital by recognised investors, funds, business angels… amounting to at least the amount of the co-financing;
• a maximum duration of 5 years;
• an exemption period for capital repayment of maximum 3 years;
• a fixed interest rate of 4% for a capital repayment exemption period of up to 1 year (for a capital repayment exemption period of 2 or 3 years, the fixed interest rate is increased to 4.25% and 4.50% respectively).

Easier financing

Young, innovative and promising companies without realised cash flows are not only assured of funding through the new Cofinancing version but also of a smooth processing of their file without special conditions. With Cofinancing for young innovative start-ups, PMV wants to make it easier for them to find funding when they have already been able to attract one or more investors or business angels at an early stage and when PMV believes in the team and chances of success of the project.

Need more money?

Do young innovative start-ups need larger amounts? PMV is happy to analyse their case and possibly fund their development via a capital participation. Moreover, if turnover and positive cash flow are realised, the credit amount can be increased within the limits of the existing co-financing framework.

If you as a borrower (natural person) do not meet all these 8 requirements, PMV cannot consider your application for funding:

1. You must be self-employed in principal occupation. A student entrepreneur (student self-employed status) does not need to be self-employed in principal occupation to be eligible for funding.
2. You must have an exploitation address in the Flemish region, or be able to demonstrate added value for the Flemish region.
3. You must have a residence permit with a residual duration of at least 2 years if you do not have EU nationality.
4. You must be the economic beneficiary of the credit you are applying for.
5. You must have an economic activity operated under the form of a sole proprietorship or a company to be incorporated in the context of obtaining financing.
6. You must not have a current financing with LRM. There is a prohibition on cumulating financing from LRM and PMV.
7. Nor may you have significant overdue debts with other financiers, NSSO, VAT, taxes….
8. You must not be involved in an unsealed bankruptcy or declared excusable in a closed bankruptcy.

As a borrower (natural person), you must not be active in one or more of the following excluded activities:

1. fishing and aquaculture;
2. primary production (cultivation) of agricultural products (if you process agricultural products in addition to cultivation, you do qualify for financing);
3. arms trade, tobacco, gambling or pornographic industry (newspapers, night shops and other shops where the sale of products from the sector concerned only constitutes a limited part of the turnover do qualify for financing);
4. activities that are illegal under Belgian or international law;
5. the production or distribution of spirits (newspapers, night shops and other shops whose sales of the products concerned only represent a limited part of their turnover do qualify for funding);
6. IT for unauthorised access to data networks or illegal downloading;
7. human cloning for research or therapeutic applications;
8. genetically modified organisms.

• the refinancing of existing debts older than 3 months (example: supplier debt) at the time of the credit application – bank credits are not refinanced;
• the financing of trading activities being the trading of goods taking place mainly in an import/export environment, with or without a speculative purpose;
• the financing of funds serving as collateral for (the obtaining of) a guarantee;
• the financing of real estate projects intended for sale or lease to third parties (financing of business centres, (the operation of) hotels, holiday parks, etc. does qualify because of short-term lease services to third parties, just as the financing of real estate projects intended for lease to affiliated companies also qualifies);
• the financing of research and development (for already existing companies with a proven track record of positive results, working capital financing for R&D purposes may be considered in the context of expanding activities);
• the financing of products or services that are not yet commercialisable, being the successful completion of the test phase, technical testing of the prototype and the like;
• the financing of the acquisition of a minority stake in the acquisition of shares (the majority of shares must be acquired or by acquiring additional shares, the majority must be obtained);
• the financing of the acquisition of part of a trading fund (the trading fund must always be acquired in its entirety);
• the financing of the establishment and operation of a sales network abroad;
• the financing of exports;
• the financing of rolling stock intended for road haulage for third parties;
• the financing of transactions in which the applicant appears on both sides of the transaction.

The credit applied for must meet the following characteristics:

• The credit shall not exceed 4 times the applicant’s own contribution.
• The credit amounts to a maximum of EUR 100,000 in the case of a Start Loan.
• The credit amounts to a maximum of EUR 350,000 in the case of a Cofinancing.
• The credit amounts to a maximum of 700,000 euros in the case of a Cofinancing+.
• The credit together with other loans from PMV shall not exceed EUR 700,000.
• The credit amounts to a maximum of 50% of the total financing in the case of a Cofinancing or Cofinancing+.
• The credit together with other public financing does not exceed 50% of the total financing.
• The credit is accompanied by an own contribution of at least 10% of the total financing in case of a Cofinancing or Cofinancing+.
• The credit is accompanied by an approved cofinancing of at least 20% of the total financing in case of a Cofinancing or Cofinancing+.
• An approved cofinancing is a long-term financing from a PMV-approved cofinancing party such as a bank, an investment fund, a business angel, a crowdfunding platform….

1. The company must be an SME: the number of employees must be less than 250 and the balance sheet total must be less than EUR 43 million or turnover less than EUR 50 million. If your company belongs to a group of companies, the figures will be looked at on a consolidated basis. The figures of participations of less than 25% are not included. The figures of participations between 25% and a maximum of 50% are included pro rata the share percentage. The figures of a venture capital company, university, institutional investor or a small local authority holding 25-50% of the borrower’s capital or voting rights are not included. The figures of shareholdings of more than 50% are fully counted.
2. The company has an operating seat in the Flemish region or must have a demonstrable added value for the Flemish region.
3. The company must be the economic beneficiary of the credit. The credit must be used to finance the borrower’s activities and not to finance a related company.
4. The company must have an economic activity. An NPO with an economic activity is eligible.
5. The company must have at least one self-employed person in principal occupation as manager or director who must be responsible for day-to-day management, own a significant share of the capital and be the economic bearer of the project.
6. The company may not have any current financing with LRM. There is a prohibition on cumulating financing from LRM and PMV.
7. The company must not be in collective insolvency proceedings.
8. The company must have filed its annual accounts within the legal deadline.
9. The company must have equity of more than EUR 61,500 in the case of a public limited company. The assessment is made on the basis of the company’s most recently available figures. The negative equity of a BV or CV must be sufficiently compensated with quasi-equity.
10. The company has a solvency of at least 10% after investment in the case of co-financing or co-financing+. Solvency is the ratio of equity to the company’s balance sheet total. Equity is adjusted with subordinated (share) holder loans (+) and current accounts assets of the managers/directors (-).
11. The company has no significant overdue debts to other financiers, NSSO, VAT, taxes, etc.
12. The company has no manager or director involved in an unclosed bankruptcy.
13. The company has director(s) with a residence permit of a residual duration of at least 2 years if they do not have EU nationality.

• the refinancing of existing debts older than 3 months (example: supplier debt) at the time of credit application – bank credits are not refinanced;
• the financing of trading activities (the trading of goods that takes place mainly in an import/export environment, with or without a speculative purpose);
• the financing of funds serving as collateral for (obtaining) a guarantee;
• the financing of real estate projects intended for sale or rental to third parties (financing of business centres, (the operation of) hotels, holiday parks, etc. does qualify because of short-term rental services to third parties; the financing of real estate projects intended for rental to affiliated companies also qualifies;
• the financing of research and development (for already existing companies with a proven track record of positive results, working capital financing for R&D purposes may be considered in the context of expanding activities);
• the financing of products or services that are not yet commercialisable (this is the successful completion of the test phase, technical testing of the prototype and the like);
• the financing of the acquisition of a minority stake in the acquisition of shares (the majority of shares must be acquired or by acquiring additional shares, the majority must be obtained);
• the financing of the acquisition of part of a trading fund (the trading fund must always be acquired in its entirety);
• the financing of the establishment and operation of a sales network abroad;
• the financing of exports;
• the financing of rolling stock intended for road haulage for third parties;
• the financing of transactions in which the applicant appears on both sides of the transaction.

• The credit shall not exceed 4 times the applicant’s own contribution regardless of the credit type applied for.
• The own contribution is at least 10% of the total financing in case of a Cofinancing or Cofinancing+.
• The credit amounts to a maximum of 100,000 euros in the case of a Start Loan.
• The credit amounts to a maximum of 350,000 euros in the case of a Cofinancing.
• The credit amounts to a maximum of 700,000 euros in the case of a Cofinancing+.
• Together with other loans from PMV, the credit amounts to a maximum of EUR 700,000.
• The credit amounts to a maximum of 50% of the total financing in the case of a Cofinancing or Cofinancing+.
• The credit together with other public financing does not exceed 50% of the total financing.
• The credit is accompanied by recognised cofinancing of at least 20% of the total financing in the case of a Cofinancing or Cofinancing+. An approved co-financing is a long-term financing from a PMV-approved cofinancing party such as a bank, an investment fund, a business angel, a crowdfunding platform….

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