Do you have a strong business plan but insufficient guarantees to convince the bank?
Via PMV, you can get a guarantee of up to 1.5 million euros, covering a maximum of 75% of the amount of your credit.
In exchange, you pay a one-off premium according to the size and term of the guarantee.
For which entrepreneurs?
SMEs, large enterprises, self-employed and liberal professions and non-profit organisations with an economic activity can all benefit from the generic Guarantee Scheme.
For which financing?
If your financial institution does not want to provide credit because you cannot offer sufficient securities, a guarantee through PMV is a good alternative. Check out the list of participating financial institutions under the terms and conditions below.
Guarantees for credit or leasing of an exclusively professional nature
with a solid and realistic business plan
Maximum amount of guarantees
up to €1.5 million
75% of your financing agreement
calculated according to the amount and duration of the guarantee
Through a financial institution
as point of contact
We want to take the next step in our development. To this end, the PMV standard guarantee was a useful tool.Hota
4 steps to a Guarantee
1/ A file for a funding agreement
If you want to conclude a financing agreement, the financial institution will first analyse your case. Each financial institution does this in its own way and according to its own internal rules. The financial institution must have confidence in you as an entrepreneur and in your project to allow the financing agreement.
2/ Additional security for the financial institution
If, as an entrepreneur, you cannot offer enough securities yourself and the financial institution considers the risk too high, the Guarantee Scheme is a possible solution to still make the credit or financing agreement possible.
3/ Signing letters of credit
The financial institution will first ask you to sign the letters of credit. It then notifies PMV of the guarantee. Thus, the financial institution is the entrepreneur’s contact and takes care of handling the guarantee file.
4/ Investigation and approval
In cases with a guarantee up to and including €750,000, the financial institution itself can decide whether or not to use the Guarantee Scheme, in consultation with you, the client. For higher amounts up to a maximum of 1.5 million euro, a thorough investigation is done by PMV and approval is required by the Flemish Minister of Economy. After payment of the premium, the guarantee is established.
General terms and conditions guarantee scheme
- SMEs and large enterprises, the self-employed, liberal professionals and NPOs can all make use of the generic Guarantee Scheme. For NPOs, however, in accordance with European law, they must carry out an economic activity. This means that they offer goods or services on the market.
- It must involve an investment on the territory of the Flemish Region or the financing of activities of an operating office of the company concerned located in the Flemish Region. Financing for exports and the establishment and operation of a distribution network abroad are excluded.
- In the generic Guarantee Scheme, you may not use the guarantee to pay overdue or existing debts. A reorganisation or rescheduling of existing or authorised credits whereby the risk is shifted to the detriment of the Flemish Region cannot be guaranteed either.
- The same company can use a maximum of €750,000 in guarantees. That amount can be increased to 1,500,000 euro, after thorough examination by PMV and approval by the Flemish Minister of Economy.
- The guarantee can cover a maximum of 75% of the amount of the credit.
- The maximum term for guarantees up to and including 750,000 euro is 10 years; for guarantees greater than 750,000 euro up to and including 1,500,000 euro, the maximum term is 5 years.
- You pay a one-off premium for the guarantee when submitting the file. This is calculated depending on the size and duration of the guarantee.
- The guarantee has a supplementary and non-obligatory character. It is in addition to the other securities required by the bank or leasing company.
Specific conditions for leasing agreements
The Guarantee Scheme can be used for these types of leases:
- Property leasing (on/off balance)
- Movable leases (on/off balance)
- Rental agreements concluded between a lessor and a borrower, with the exception of contracts for passenger cars, under which the lessor acquires the asset in order to lease it to the borrower with a capital reconstitution on the part of the borrower of at least 90% through rents.
- Full option contracts (including maintenance and/or services) can be guaranteed, but only for the capital part. The maintenance and/or services part is excluded from the Guarantee Scheme.
These agreements are not eligible:
- A sale and lease back construction is excluded from the Guarantee Scheme. In such an arrangement, a customer sells goods to a leasing company and then immediately takes them back into leasing/renting by paying periodic fees.
- Vendor leasing is also excluded from the Guarantee Scheme. This involves a supplier entering into a leasing contract with a customer in its own name. The leasing company then takes over that contract in its entirety, so that the leasing company collects the instalments directly from the customer.
- Passenger cars are also excluded from the Guarantee Scheme. PMV uses as its definition for passenger car: any car whose interior space is designed and built exclusively for the transport of persons and which, when used for the remunerated transport of persons, may have no more than eight seats excluding those of the driver.
The financial institution as point of contact
If you want to benefit from a guarantee of up to €1.5 million, it is best to turn to your financial institution. They are the ones who decide whether or not you are eligible for a guarantee.
These financial institutions offer the guarantee scheme:
Bank J. Van Breda & Co: www.bankvanbreda.be
Belfius Lease: www.belfius-lease.be
Belfius Lease Services: www.belfius-lease.be
Beobank nv: www.beobank.be
BNP Paribas Fortis: www.bnpparibasfortis.be
De lage Landen Leasing: www.dllgroup.com
ES Finance: www.leasingsolutions.bnpparibas.be
ING Belgium: www.ing.be
KBC Bank: www.kbc.be
Coöperatieve Rabobank U.A.: www.rabobank.nl
Triodos Bank: www.triodos.be
Trividend Provincie Antwerpen : www.trividend.be/diensten/trividend-provincie-antwerpen/
VDK Bank: www.vdk.be
FAQs about guarantees by entrepreneurs
What is the generic guarantee scheme?
The guarantee scheme is a means of facilitating credit for entrepreneurs. It allows the bank or leasing company to have up to 75% of the credit or leasing agreement guaranteed by the Flemish Government. The guarantee scheme has existed since 1959 but has been modified several times over the years.
The financial institutions with which PMV works have the possibility, within a predetermined budget and the legislative framework, to decide themselves to use a guarantee from the Flemish Region for credits or leasing agreements. Each financial institution decides this using its own procedures, taking into account the conditions agreed with PMV.
In files with a guarantee up to 750,000 euro, the financial institution itself can decide whether or not to use the Guarantee Scheme. Of course, this is always done in consultation with the customer.
PMV does not oblige the financial institution to request additional collateral if it wishes to use the Guarantee Scheme. This means that the bank or leasing company can decide for itself what additional collateral it takes.
The Guarantee Scheme can also be used to support loans for working capital.
The generic Guarantee Scheme cannot be used for credits that serve to repay existing debts.
The Guarantee Scheme can be used for a number of forms of bridge financing. For example, it is possible to extend a cash credit that is already guaranteed and is coming to maturity. It is also possible to extend the guarantee of an already secured credit. The duration period of the credit – for example, the repayment period of an investment credit – is then extended. The guarantee period can be extended for a maximum of five years, including a previous extension period.
What are the amounts of the guarantee scheme?
The financial institution itself can decide on the use of the Guarantee Scheme for files with a guarantee amount up to 750,000 euro per company.
For guarantee amounts between €750,000 and 1.5 million, the financial institution forwards its application to PMV. After a thorough analysis, PMV then submits the file to the Flemish Minister of Economy for approval.
Who can benefit from the guarantee scheme?
The Guarantee Scheme can be used for SMEs and also for large companies, the self-employed, liberal professions and non-profit organisations. For NPOs, however, in accordance with European law, they must carry out an economic activity. This means that they offer goods or services on the market.
A list of all admitted and all excluded sectors can be found here. (in Dutch)
How is the premium for the guarantee scheme calculated?
The premium for the Guarantee Scheme is calculated according to the following formula:
amount of the guarantee x duration of the guarantee in years x 0.5%
You must pay the premium in one lump sum in advance, at the time of filing.
What if it goes wrong?
If you are no longer able to repay your credit, your financial institution can cancel the credit or leasing agreement and call in the guarantee.
In that case, PMV will pay its share of the outstanding balance to the bank or leasing company, up to a maximum of 75%.
However, this does not mean that as a borrower or guarantor, you are released from your debt. The financial institution has to extract the credit file, including by cashing in the other collateral and appealing to the guarantors, and will try to recover the entire debit balance. Part of these recoveries will be forwarded to PMV.
Who should I turn to for a guarantee scheme?
To apply for the Guarantee Scheme, contact your financial institution. A large number of financial institutions offer this scheme. It is the financial institution that decides whether you qualify for the Guarantee Scheme when financing your business.
A list of financial institutions offering the Guarantee Scheme can be found above under Conditions.
State aid and de-minimis?
The Guarantee Scheme is a form of state aid and is subject to strict regulation. Guarantees covered by the de minimis aid are limited in amount and/or time. State aid is calculated as follows: guarantee amount x 2.6666666667% x duration of the guarantee. The total amount of de minimis aid granted to one enterprise may not exceed €200,000 over a period of three fiscal years. For enterprises operating in road haulage for third parties, this is 100,000 euros.
Information for financial institutions
How does the guarantee scheme work for financial institutions?
Granting of a guarantee quota
On the proposal of PMV, the Flemish Minister of Economy launches a call on a regular basis (at least once a year) to find out which financial institutions are interested in receiving a government guarantee. A guarantee quota is allocated by the minister to those institutions that respond to the call and meet the specified conditions.
The financial institutions granted a guarantee quota are referred to as ‘guarantors’. Each guarantee holder enters into a framework agreement with PMV prior to granting guarantees. This framework agreement contains the agreements between the parties on the further implementation of the guarantee scheme.
Notification of guarantees
Guarantors can notify a guarantee within the regulatory framework up to a maximum of 75% of the loan amount.
After notification, PMV registers the guarantee and the guarantor is requested to pay the premium.
After payment of the premium, the guarantee period begins to run.
For guarantee amounts above EUR 750,000 and up to EUR 1.5 million, the credit file and the guarantee application will be examined before registration. On the advice of the PMV, the competent minister grants or does not grant the guarantee or sets additional conditions.
Calling a guarantee
In the event of default by the borrower and the guaranteed credits becoming due, the guarantor may call in the guarantee. Provided the file meets the legal conditions, PMV will proceed with payment of the guaranteed amount (maximum 75% of the theoretical outstanding capital, plus up to one year of overdue capital and overdue interest).
The guarantor remains responsible for recovering the credit file, inter alia through cashing existing collateral (mortgages, commercial cases, pledges receivables, guarantees, etc.). The recoveries must be passed on to PMV according to a distribution key.
The distribution key is calculated on the basis of the ratio between the intervention paid by PMV and the total eligible debit balance at termination.
How is state aid in the guarantee scheme calculated?
When granting a guarantee that is de minimis aid, European regulations (*) stipulate that the total amount of de minimis aid granted to a single undertaking must not exceed €200,000 over a period of three fiscal years. For companies active in road haulage on behalf of third parties, this is 100,000 euros.
For guarantees, this aid, called gross grant equivalent (GGE) is calculated as follows:
Gross grant equivalent = guarantee amount granted x 2.6666667 % x duration
Guarantees exceeding €750,000 are limited to a maximum of 5 years.
If a company is granted both de minimis aid and other form of State aid for the same project / costs, cumulation is possible provided that the sum obtained through both aid measures (de minimis aid + other form of State aid) is below the respective ceilings.
(*) Commission Regulation (EU) No 1407/2013 of 18 December 2013 for the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid, published in the Official Journal of the European Union of 24 December 2013, L352, p. 1
Can I combine a guarantee with a Starter Loan or a Co-financing(+)?
Attention: when taking out a Starter Loan or a Cofinancing(+), a different formula is used to calculate the gross grant equivalent:
amount of Start Loan (or Cofinancing(+)) x [(reference interest rate (*) – I(**) %) + 4 % (***)] = gross grant equivalent
(*) defined by the European Commission, available online at ec.europa.eu
(**) interest rate Start Loan or a Cofinancing(+)
(***) percentage set by Europe for subordinated loans when calculating gross grant equivalent
In year 1, an SME obtained Cofinancing of €150,000. The interest rate for this loan was 3%.
In year 2, the SME obtains a loan of €1,000,000 from the bank for which a guarantee amount of €750,000 is requested for 6 years. When the bank grants the loan, one must check that the SME does not exceed the ceilings for PMV intervention and de minimis aid.
Total amount of de minimis aid = aid Cofinancing
Aid Co-financing: in year 2, the outstanding capital is €125,000. The gross grant equivalent (GGE) of this loan is:
125,000 euros x [(0.12% – 3%) + 4%] = 1,400 euros
BSE Guarantee Scheme = 750,000 euros x 26.666667 % x 6/10 = 120,000 euros
Total de minimis aid = 1,400 euros + 120,000 euros = 121,400 euros
Conclusion: If the company is not active in road transport, the maximum amount of aid will not be exceeded. If the company is active in road transport, only a guarantee of 4 years (GGE = 80,000 euro) or only a guarantee amount of 575,000 euro for 6 years (GGE = 92,000 euro) can be granted.
35th call to financial institutions
The Flemish Minister of Economy, on behalf of the Flemish Government, is launching a call (in Dutch) to find out which financial institutions, mutual guarantee companies, leasing companies and social economy lending companies want to become guarantors in order to link guarantees to financing agreements, leasing agreements or other transactions with an SME.
26th call to financial institutions (extension)
The minister will extend the validity period of call twenty-six until 31 December 2023 for guarantors, who were granted a guarantee following call twenty-six: extension call 26 (in Dutch).
FAQs for guarantors
What is a ‘company’ under the guarantee scheme?
The Guarantee Scheme must comply with the requirements of the de minimis Regulation. An undertaking is, for the purposes of the Treaty’s European competition rules, any entity engaged in an economic activity, regardless of its legal form and how it is financed.
Moreover, the current de minimis regulation provides that ‘one undertaking’ includes all undertakings having at least one of the following links with each other:
- One company has the majority of the voting rights of the shareholders or associates of another company.
- One company has the right to appoint or remove a majority of the members of the administrative, management or supervisory body of another company.
- One enterprise has the right to exercise a dominant influence over another enterprise pursuant to an agreement concluded with that enterprise or a provision in the latter’s articles of association.
- One company which is a shareholder or partner of another company has sole control over the majority of the voting rights of the shareholders or partners of the latter company by virtue of an agreement concluded with other shareholders or partners of that other company.
Enterprises which maintain, through one or more other enterprises, any of the links referred to in points (a) to (d) of the first subparagraph shall also be considered as one enterprise.
Are non-profit organisations allowed?
Yes, provided they can prove that they are a company that, within the meaning of European law, carries out an ‘economic activity’.
What is a company ‘in difficulty’ under the generic guarantee scheme?
The de minimis regulation does not contain a definition of this term. Relevant for this question, however, is the following provision of the de minimis Regulation:
‘Aid comprised in guarantees shall be treated as transparent de minimis aid if the beneficiary is not subject to and does not fulfil the criteria under national law for being made subject to collective insolvency proceedings at the request of its creditors. In the case of large enterprises, the beneficiary is in a situation comparable to a credit rating of at least B- , …’
Can a company coming out of the Continuity of Enterprises Act (LCE) that obtains new credit rely on the guarantee scheme?
Even after going through the WCO/LCE, there is a need to test whether the company meets the conditions of the de minimis regulation. Thus, granting a guarantee is not ruled out after such a procedure, but the verification of the parameters of the de minimis regulation will have to be done.
Which sectors are excluded?
Based on de minimis regulation, enterprises from the following sectors are excluded:
- Enterprises from the fisheries and aquaculture sector, to the extent covered by Regulation (EC) No 104/2000.
- Enterprises from the sector of production of agricultural products.
- Enterprises from the sector of processing and marketing of agricultural products, in the following cases:
– when the amount of the guarantee is set on the basis of the price or quantity of such products purchased from primary producers that are gebrac by the undertakings concerned on the market
– when the guarantee is made conditional on this aid being partly or entirely passed on to primary producers
- Enterprises seeking a guarantee for activities related to exports to third countries or EU Member States, in particular where the guarantee is directly related to the quantities exported, and guarantees granted for the establishment and operation of a distribution network or other current expenditure related to export activities.
- Where the guarantee depends on the use of domestic rather than imported goods.
- A guarantee for a credit for the purpose of investment in rolling stock is excluded for undertakings in the road haulage sector for third parties. For such enterprises, the ceiling of the gross grant equivalent is halved to 100,000 euro (guarantee up to 5 years of up to 750,000 euro and over 5 years up to 10 years up to 375,000 euro) for investments other than investment in rolling stock.
When an undertaking operates in sectors 1, 2 or 3 and is also active in one or more other sectors or carries out other activities, a guarantee may be granted provided it has been ensured, by appropriate means such as separation of activities or breakdown of costs, that activities in the sectors excluded from the scope of de minimis do not benefit from a Guarantee Scheme.
Can a financing agreement be guaranteed if it is granted to two companies, one of which belongs to an excluded sector?
Yes, provided the guaranteed funding is not used for an investment in an excluded sector.
Where should the funded investment or activity take place?
It must be an investment on the territory of the Flemish region or activities of an operating office of the company concerned located in the Flemish region.
A natural person purchases a property for rental to a company. Can a guarantee be obtained for this loan?
No, unless the natural person purchases the property as part of his or her own economic activity.
Can an existing line ( for instance €100,000) that was not yet guaranteed and is now being increased by €20,000 be guaranteed?
No. A guarantee can only be obtained for the 20,000 euro increase.
This applies to both fixed-term and open-ended lines.
PMV will regard the cash credit increase as a new credit. In the event of any call-off, the intervention will be calculated on the amount of the increase.
Should a guarantor wait to apply for the guarantee until the notarial deed is past?
The commitment for a mortgage credit cannot be notified to PMV before the date of execution of that authentic instrument.
If a mortgage credit is disbursed with the intervention of PMV, the bank cheque issued by the guarantor at the time of execution of the deed for the mortgage credit must be directly debited from this credit.
May a guarantor already make money available to the client before the guarantee has been notified and before the other securities have been established?
When making the funds available, the guarantor will have to follow its own procedures. In any case, a financing agreement will have to be signed beforehand.
Collateral can be established after the provision. The guarantor must ensure that the collateral is established timely and correctly.
Furthermore, the guarantee must be notified within a period of 3 months after signing the financing agreement.
In a takeover of shares, must one take the majority of the shares to be able to rely on the guarantee scheme?
No, even if one acquires only one share, one can invoke the Guarantee Scheme, provided that it concerns an investment in the Flemish Region or an activity of an operating office of a company located in the Flemish Region.
Can a guarantee be obtained for a loan to a company that passes the funds on to another company?
Yes, that is possible, provided that this company (i.e. the final receiver) does not use the funds to repay existing debts.