Started in October 2016, by the Walloon region, the booster loan for start-up businesses has already enabled the raising of €1.3 million in business capital. This is over a period of nearly six months.
This is published today in the newspaper L’Echo, on the basis of figures from the Office of the Walloon Minister for Economics.
This initiative, inspired by the “win-win loans” scheme in Flanders and the “Aunt Agatha” loans in the Netherlands, aims to use private savings in start-up businesses. Such businesses are those trading for up a maximum ceiling of five years, beyond which businesses are ineligible for the scheme.
Apart from the loan interest payable, the individual grants a loan which enjoys a maximum 4% per year tax credit on the total borrowed during the first four years, and 2.5% for the subsequent four years. There are ceilings anticipated under the scheme. These are set at €50,000 for the lender and €100,000 for the borrower firm.
L’Echo says that since the booster loan scheme started last October, 63 borrowing registration requests have been sent to SOWALFIN (the organisation which puts businesses in touch with lenders). This totals an overall capital amount raised by firms of €1.382 million, between October 1st and March 15th. The Office of the Minister for the Economy declares this to be “a resounding success.” By comparison, in Flanders the initiative had generated some 144 requests in its first year alone.
Furthermore, available figures on lender profiles show that 38% of lenders are between 56 and 65 years, and 35% have taken early retirement or are pensioners. Family ties are very marked, as 75% of lenders have a family relationship with the given business. Some 20% are known to or are friends of the specific entrepreneur, and 5% come from their particular professional network.
In 41% of cases, the sum lent is less than €10,000.