Are you looking for a business loan to launch or expand your business, but the bank is asking you for guarantees that you’re unable to provide?
What is the Brussels Guarantee Fund?
The purpose of the Brussels Guarantee Fund is to provide credit institutions, through the payment of a single premium, with a substantial portion of the guarantees that they demand from SMEs and self-employed individuals for the granting of business loans in the Brussels-Capital Region.
finance&invest.brussels takes care of the operational management of the Fund via a delegated mission.
The intervention of the Brussels Guarantee Fund can be requested by the business itself (pre-agreement) or by the bank or financial institution. The Fund offers a guarantee covering a maximum of 65% of the amount of the loan. For startups less than four years old, the maximum coverage is 80%. The maximum guaranteed amount is €500,000 (this cannot be exceeded without prior written authorisation by the responsible minister).
WHO IS ELIGIBLE?
- SMEs, micro-enterprises, self-employed individuals, liberal professions and non-profits
- All business sectors, with a few exceptions (see the list on the Fund’s website)
- The investments or operations must be carried out in the Brussels-Capital Region.
For an existing business, two criteria must also be met:
- The capital structure ratio of the company benefiting from the Fund’s intervention or of the project must be at least 10%. This is the ratio between the corrected equity and the balance sheet total, including the new project;
- The working capital must be positive or become so with the financing of the project.
Your accountant will be able to help you check these criteria. They are not applicable for businesses that are just starting their activities.
WHAT ARE THE CONDITIONS?
The businesses must make their investments in the Brussels-Capital Region. Maintenance of the Fund’s guarantee is conditional upon the investment being located in Brussels.
Credit institutions that rely on a Fund guarantee must pay a single lump-sum premium. The costs are detailed on the Fund’s website.
HOW TO APPLY?
A Fund guarantee can be applied for in three different ways:
Pre-agreement: the SME or self-employed individual submits an application directly to the Fund to obtain a prior agreement in principle (valid for four months) to the granting of the loan guarantee. The Fund will give a response within 15 business days. The SME or self-employed individual will then talk to its chosen bank to apply for a loan, and will be able to present the Fund’s pre-agreement as a favourable element for obtaining the loan. The bank must then ask the Brussels Guarantee Fund to confirm this pre-agreement.
On-demand Guarantee: the bank submits to the Fund a guarantee application file or, where applicable, a request for confirmation of the agreement in principle. The bank thus acts as an intermediary between its customer – the loan applicant – and the Brussels Guarantee Fund, the guarantor. In this case too, the Fund will give a response within 15 business days.
The Express Guarantee: under certain conditions, the Fund’s response time may be reduced to eight days.
All the application forms are available on the Fund’s website.
Contact the Brussels Guarantee Fund