NOM: Looking back on the COVID-19 bridge fund for startups


As of October 1st, applications for the Corona bridging loans (COL) for startups, scale-ups and innovative SMEs are closed. Over 100 companies in the Northern Netherlands applied, with currently more than €11 million in loans granted. Rob Drees, fund manager for the Investment and Development Agency for the Northern Netherlands (NOM), was part of the national team tasked with setting up the emergency fund and looks back on a hectic five months of helping startups survive a pandemic.

When the lockdown began, the Dutch government announced emergency measures to help companies stay afloat and prevent mass unemployment. Despite these measures however, a survey conducted by TechLeap showed that as much as 55% of startups would not survive the lockdown. “Startups are very different from traditional businesses”, Rob Drees says. “They rely on investors, they can’t really get a bank loan and either aren’t eligible for those emergency measures, or the measures aren’t relevant for them. But startups are a vital part of our economy and this created a huge gap. So something had to be done and done fast.”


Dropping everything you’re doing

TechLeap was an important initiator of the COL emergency fund and the regional development agencies were tasked with the coordination. “I was part of the national team responsible for setting everything up and suddenly, you have to drop everything you’re doing and focus on getting it done together in two weeks”, Drees explains. 

“That’s a very daunting and challenging task, to say the least. How much is needed? How do you divide the total budget per region? How can we make sure entrepreneurs get their loans as fast as possible? And all the while you're also communicating back and forth with the individual regional development agencies, the government, the EU and making sure everyone is on the same page and in full agreement. I’m very proud that we were able to get it done so fast and really help struggling entrepreneurs in time.”


The difficult task of rejecting and approving

So far, out of a total of €300 million, over €11 million went to companies in the Northern Netherlands. “I think about half of the applications we got were submitted in the first four days”, Drees says. “Over a 100 northern startups applied for the COL and around half of them got approval for a loan, which is a little above the national average, with some applications still currently under consideration.”

“It’s a difficult process to decide who is eligible for a loan and who isn’t. You need to figure out first whether a startup is really struggling because of COVID-19, or if their struggle is not directly related to the pandemic.. That’s not always easy to figure out. The other thing you need to take into account is that the COL is not a gift, it’s a loan and has to be paid back in installments, already starting in April of next year. That’s also why we thoroughly go through the finances and projections and calculate a startup is already unable to make the first payment for example, we can’t approve the loan. The past five months have been hectic, but the whole process will probably go on for the next three to five years.” 

One thing Drees admires about startups, whether they’re eligible for the COL or not, is their resilience. “We do what we can and help where we can”, he says. “But it’s amazing to see how some startups really make a virtue of necessity, roll with the punches and completely reinvent their business model. Some of the ones I spoke to a few months ago are now doing great.”



One of the startups that applied for the loan was Bondex, a blockchain based trading platform where you can buy and sell bonds. The process of applying was not always easy, but overall, co-founder Daan Ellens is very positive. “It took us a couple of hours and there was a lot of documentation to submit, but that’s to be expected of course. And fortunately, we’re somewhat further along, so we can provide things like next year’s financial forecast, but I can imagine it’s not as easy if you’re in the very early stages. We were assigned one of the NOM COL-team members as contact and he was very responsive and the process was really fast. We got a phone call on a Saturday to provide the last bit of information and everything was filed on Monday. Even though we didn’t get as much as we initially asked for, we wouldn’t exist today without their help.”

With the loan comes another light at the end of the tunnel, according to Ellens: “We’re going to need a new round of investments later on, but a really big added benefit of the loan is the validation process. We wouldn’t have gotten this loan if our business model wasn’t viable and it’s essentially the same process you would normally go through with an investor. The only difference is that this took weeks instead of months. So this loan and also the trust we’ve got from the NOM, makes it a lot easier to find future investors.”

Photo credits: NOM/Shutterstock