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Finance your business in difficult times

This information is provided by:Netherlands Chamber of Commerce, KVKNetherlands Chamber of Commerce, KVKNederlandse versie

Your business is not doing too well. You have hit a rough patch: you cannot make payments or investments anymore. Acting now can prevent a worse outcome. Sometimes, finding extra money is not the (only) solution. Read how to prepare for financial difficulties in your company, what you can do yourself, and when you should enlist help.

Prepare to deal with financial difficulties in your company

Before you start taking measures, find out how your company is really doing.

  • Make sure the starting point is clear. You may have a good insight into how your business is doing. But only hard facts and figures can tell you what the reality is. Keep your records up-to-date and accurate. Perhaps you have already drawn up an estimate of the yearly turnover and sales. These will provide a quick and clear insight into your situation.
  • What are the unique selling points of your product or company? In other words, what sets you apart from your competitors? And have you done market research to find out what your customers actually expect from you?
  • Ask for an outsider’s help. An external adviser will look at your company differently, and without bias. You can research the viability of your business. Such research also includes mapping the business skills of the entrepreneur and the management.

Tips for preventing or dealing with difficulties

You cannot put a value on everything. And you cannot finance everything. In some cases, a loan or credit is not the solution. An external adviser can help you evaluate your product’s marketing options. Or the viability and financial structure of your company.

Maybe the market for your product is not big enough. In that case, you need to rethink your product strategy. A marketing campaign might reach a new market for your products. Or perhaps you feel you need to reorganise and make a fresh start with different products, or a smaller range of products. If you do, you need to be sure you have the funds to do so – and the future prospects to warrant it. To make sure you know where you stand, follow this advice:

  • Keep your administration up-to-date and accurate. That way, you know how your product and company are doing.
  • Take a good look at your debtor management. Improve your processes, for example by requesting a receipt confirmation. And check the status of invoices before the payment term has expired. You will often get paid sooner.
  • Use the KVK MKB Diagnosetool (in Dutch) to see how your business is doing. The tool will provide you with an independent and reliable custom-made advisory report and practical tips.
  • Wasting time could be your worst mistake. Do not wait for the bank to reclaim your credit, or for a supplier to repossess your inventory. Get help and stay in charge of your business.
  • Are you unable to pay your employees’ wages? Notify the Tax Administration of your company’s insolvency. The Employee Insurance Agency UWV may take over part of your payment obligations.
  • Always file tax returns in time. If you cannot pay your taxes, report your insolvency for taxes and premiums to the Tax Administration. This will prevent the Tax Administration from sending you an assessment with not only an estimate of what you have to pay, but also a fine.
  • Visit the KVK Zwaar Weer Routewijzer (in Dutch). Answer a few questions. And find a step-by-step plan that suits your situation.

How to finance your plans

If you do need external financing, one of the options is refinancing existing credits. You can go to your bank, or use an alternative financing method. Perhaps you can use the Financial support for self-employed professionals (Bbz). But in some cases, there are simply too many debts. Your business may be viable and your management sound, but you simply cannot make the payments and pay interest. In that case, debt restructuring may be the best option for all parties involved -- including the creditors. For businesses without legal personality such as the eenmanszaak or the vof, debt restructuring is often a better solution than a bankruptcy. Check the Debt flowchart to see which options are available for dealing with problematic debts.

Who can you talk to?

Do you want to discuss your situation with someone? You can contact the KVK Advice Team for advice, but also for referrals to other organisations, such as:

  • Ondernemersklankbord OKB (Sounding board for entrepreneurs, in Dutch), a national network of experienced ex-business owners and specialists who help you review your business and management with a critical eye. The advisers work as volunteers and ask you to become a donor of the OKB foundation.
  • MKB Doorgaan (SME continue, in Dutch), a national organisation that helps SMEs and zzp’ers whose business is viable at heart. They help keep the business healthy. The first consultation is free of charge.
  • Municipalities execute the Financial support for self-employed professionals scheme, Bbz. This scheme can support you via a loan or by supplementing your income to the level of a welfare benefit.
  • Your accountant or bookkeeper already knows your company. This makes them a good discussion partner if you want to find out what your options are.

Step-by-step plan Dealing with debts

Do you have debts and are you facing problems? Talk about it and take action as soon as possible. Go to the KVK Step-by-step plan Dealing with debts.

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