Government measures to improve your liquidity because of corona: practical tips and warnings
Date: March 16, 2020
Modified November 14, 2023
Written by: Erik Jansen
Reading time: +/- 2 minutes
Date: March 16, 2020
Modified November 14, 2023
Written by: Erik Jansen
Reading time: +/- 2 minutes
The government is taking several measures to help you as business owner if you run into liquidity problems due to the corona crisis. In this article I list them, give practical tips and also warnings!
Our firm has also already published blogs on tips for HR and tips for construction. This blog is about the lifeblood of your business: #liquidity.
TIP: This scheme must be applied for through your bank. The Ministry of Economic Affairs guarantees loans to business owners through the BMKB scheme so that they can raise money more easily. In the regular scheme, the guarantee credit is 50% of the credit provided by the financier. The government's guarantee amounts to 90% of this guarantee credit. This broadening measure increases the size of the guarantee credit in the BMKB from 50% to 75%.
This will allow banks to extend credit easier and faster, and companies will have the opportunity to borrow earlier and more money. Moreover, compared to the earlier announcement (Thursday, March 12, 2020), the scheme will be further widened and also applicable to bridge loans and current account loans with a maturity of up to 2 years.
The BMKB can be used by companies for bridging credit or increasing their current account credit, or the amount they are allowed to be 'in the red'. The BMKB application goes through the accredited financier, in this case usually the bank. The accredited financiers are listed on the RFO website. business owners report to their bank. The conditions for the BMKB scheme can be found on the website of the RVO: https://www.rvo.nl/subsidie-en-financieringswijzer/borgstelling-mkb-kredieten-bmkb.
WARNING: Under this scheme, the government issues a bond (a #guarantee) to the bank. Not to you as business owner. Should you not be able to repay the loan to the bank, the bank can turn to the government. But beware: if the government then paid the bank on the basis of the guarantee, the government will then come and take the money back from you! This is called "taking recourse." This is a particular risk if you are a guarantor with your holding company or with your private assets or are jointly and severally liable to the bank. So then the government can also recover from your holding company or your private assets! I wrote a blog about this earlier, which you can read here: https://poelmannvandenbroek.nl/actuele-zaken/staatsgarantie-risico-voor-business owner-remains-existing/
TIP: The IRS website tells you how to apply for tax deferrals: https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/berichten/nieuws/uitstel-betaling-gevolgen-coronavirus. The Tax Office has made this fairly simple. You make the request for special deferral of payment "simply" with a letter. No special form has been developed for it. The Tax Office evaluates your letter as a request. Once the Tax Office receives the letter, the collection measures are suspended. Tip: You can annotate the letter or have it delivered by courier to get proof of receipt. Normally, an objection has no suspensive effect, so note clearly in your letter that you are requesting a postponement of payment because of the corona virus. Collection action will then be stopped. You will then not have to pay a fine (which automatically rolls out of the IRS's PC) (unless your request is denied - after the fact).
The letter must be accompanied by a statement from an outside expert. This could be an outside consultant or financier, a trade association, or your own accountant or financial advisor or we, your attorney. The statement must show that:
WARNING: This deferral of payment does not alter the fact that as a director, you may be or become liable for unpaid tax debts. It is therefore wise to report #payment inability to pay in addition to the request for deferral of payment. You can read how to do this on the website of the tax authorities: https://www.belastingdienst.nl/wps/wcm/connect/bldcontentnl/themaoverstijgend/programmas_en_formulieren/melding_van_betalingsonmacht_bij_belastingen_en_premies or discuss it with your accountant.
TIP: A simple way to create liquidity space is to adjust the provisional corporate tax assessment 2020. After all, this was already imposed on you in February 2020 based on an expectation for all of 2020. Due to the corona crisis, there is a good chance that you may not make that profit. You must file a request for a reduction of this provisional assessment electronically. Consult - where necessary - your accountant.
TIP: Should these tips not help you (enough), it is important that you get well-informed and timely (as soon as possible) about the consequences, risks and opportunities of suspension of payments and/or bankruptcy. It would go too far to discuss all that in this blog. But you can always contact me for that.
As attorneys for business owners , we understand the importance of staying ahead. Together with us, you will have all the opportunities and risks in sight. Feel free to contact us and get personalized information about our services.