SMEs are the backbone of the Dutch economy and are essential for major transitions and the innovative solutions needed. However, when it comes to financing and international expansion, there are many barriers. Invest International provides financing solutions where funding through traditional channels and banks is not feasible. As a result, we act as an accelerator for SMEs seeking growth and aiming to enhance their global competitiveness.
Financing solutions for Dutch SMEs
Invest International supports Dutch businesses with financing solutions to achieve growth ambitions abroad. Whether it concerns an investment loan, export financing with working capital, or financing based on public schemes such as the Dutch Good Growth Fund. There is also funding available for project development, known as ‘incubator projects.’ This type of financing is often used for feasibility studies.
SMEs are increasingly turning to Invest International. “The strong demand for SME financing shows that there is a need for greater support. International business has become more complex. Banks often cannot provide the necessary funding due to high costs and risks, particularly for innovative companies looking to scale up in other countries. Additionally, increasing regulations and the associated costs often make banks hesitant. Exporting to countries with economic and/or political instability is also challenging due to heightened payment risks. However, where possible, we actively seek to collaborate with banks, which we do frequently. A win-win, because we can do our business and the bank can keep their client relationship intact when a deal doesn’t yet fit within their risk appetite or business case” says Koen Hamers, Manager Startup, SME & Midcorp.
Director Leendert-Jan Visser of Royal Assocation MKB-Nederland confirmed this issue during a broadcast on BNR Nieuwsradio. “These investments often take place outside of Europe, where our private banking network has less focus.” He added: “Invest International truly benefits the Netherlands and SMEs, as most revenue is generated abroad.”
Suncom Energy
Suncom Energy is one example of a Dutch SME wanting to scale abroad. The company developed the highly innovative Concentrated Solar Power (CSP) technology, providing sustainable heat for industrial processes. “Suncom Energy offers a continuous and reliable source of industrial heat, which is essential for the transition to sustainable energy,” says Itske Lulof, Sector Head of Energy at Invest International. “This technology is especially valuable in countries with unstable power grids and high energy costs.”
Being it a new technology in the scale-up phase, banks were hesitant to provide financing and industries hesitant to buy the new technlogy. “The biggest challenge for us is to demonstrate the operation of SunFleet to the industry”, founder Henk Arntz explained in an MT Sprout article. “An innovative technology is new and therefore exciting. Given the size of the investment, companies find it exciting, which is why many companies prefer to see it in operation at their neighbours first.”
Investment Manager Ivo van der Horst: “We look at the same components as mainstream financiers: we also want a company, and therefore the financing, to be a success. We are not naive: we know the target group and the context in which start-ups operate. But we try to look beyond just the risk on paper.”
Through funding from the Dutch Trade and Investment Fund (DTIF), Suncom was able to establish itself in Spain and implement its innovative technology at Smileat, a producer of organic baby food.
Export Financing
Also SMEs wanting to export face a number of financial challenges, although exports make up a significant portion of the Netherlands income. Each year, approximately €330 billion is earned through exports, accounting for more than one-third of the country’s total income, according to the Dutch Ministry of Foreign Affairs.
Traditional banks often refrain from financing relatively small export amounts or taking on certain risks, partly due to the Basel Accords, which require banks to maintain minimum capital reserves based on risk profiles. The associated costs of customer identification and fraud prevention further complicate matters. Koen Hamers explains: “For banks, it is nearly impossible to provide loans under €5 million. Invest International can, and in consultation with Dutch banks, fills this gap.”
Bridging the financing gap
Together with OHV Asset Management and Atradius Dutch State Business, Invest International has stepped into this space. Companies can receive export financing (supplier credit) for smaller amounts ranging from €100,000 to approximately €5 million. This funding is intended for capital goods such as bakery and agricultural machinery, equipment, and transport vehicles. The Dutch economy generates the most revenue from machine and machine parts exports, totaling €25.5 billion in 2022, as recently reported by Statistics Netherlands (CBS).
Export financing consists of a package of financial solutions to prevent liquidity problems that may arise due to export transactions. “A foreign buyer will not always pay immediately. There are two solutions: supplier credit or working capital financing. This improves the entrepreneur’s competitive position. A working capital loan provides the necessary funds to purchase materials before goods or services are delivered,” says Davey Zuijderwijk of OHV Asset Management, which executes the transactions on behalf of Invest International. So far, approximately €80 million has been allocated, and working capital financing is now also available. The fund aims to grow to €150 million in the long term.
Growth, sustainable solutions & resilience
Appropriate financing is necessary for growth, innovation, and sustainability investments. Elwin Houtekamer of MEAF Machines, a recipient of export financing through Invest International, explains: “The startup phase is long behind us, so we can turn to regular banks for standard business needs like purchasing real estate. However, expanding abroad or obtaining export financing for our customers is a much more challenging process. Access to financing is crucial for innovation and competitiveness. Expanding SME financing, as both the Netherlands and Europe advocate, is a no-brainer. Otherwise, we risk being overtaken by other countries manufacturing the same machines for a quarter or half the cost.”
Competitive Compass EU
“Financing for SMEs helps Dutch entrepreneurs increase revenue and build resilience,” Hamers explains. “It contributes to the growth of individual businesses and the broader competitive position. This aligns with the ‘Competitiveness Compass’ of the European Union, which focuses on innovation-driven productivity, sustainable prosperity, and strengthening European industry.”
Invest International collaborates with ministries, major banks, development banks, industry organizations, and the European Union to create the best SME financing environment in Europe. “This is truly something we need to achieve together, involving all stakeholders within our ecosystem and entrepreneurs.”
