Guarantees
Make it easier to obtain professional credit from your bank
Guarantees cover a substantial portion of the collateral that banks require from Brussels-based entrepreneurs when granting professional loans. In many cases, without a guarantee, the bank would not approve the loan.
Guarantee applications can be submitted on their own or alongside the Guarantee Plus formula for investment loans covered up to 1.5 million €.
What is a guarantee?
A guarantee is essentially a form of insurance that covers part of a professional loan granted by a bank.
If the company is unable to repay its loan, and provided certain conditions are met, the guarantee may be used by the bank to recover part of the outstanding amount.
This guarantee is subscribed to by the company and provides advantages for both parties:
- For the lender (the bank): the guarantee helps spread the risk of non-repayment, for example in the event of bankruptcy.
- For the borrower (the company): when the bank’s assessment is positive (repayment capacity, proven business viability, etc.), the guarantee makes it easier to obtain professional financing (leverage effect).
Only the bank may submit a guarantee application to finance&invest.brussels.
As an entrepreneur, you can discuss this with one of the finance&invest.brussels partner banks: Belfius, BNP Paribas, ING, KBC, Beobank, or Banque Van Breda.
Who is it for?
A guarantee may be proposed by the bank for any professional loan request from a business meeting the following criteria:
- Micro, small and medium-sized enterprises (SMEs), self-employed professionals, liberal professions, and non-profit organisations (ASBL/VZW) carrying out economic activities;
- Fewer than 250 full-time equivalent employees;
- Annual turnover below 50 million € or a balance sheet total below 43 million €;
- Located in Brussels (the establishment unit for which financing is requested must be in the Brussels-Capital Region);
- Not considered to be in financial difficulty (criterion applicable only to companies older than three years).
NB : A company is presumed to be in financial difficulty when:- 1. Its equity has fallen below half of its subscribed capital and more than one quarter of that equity has been lost during the previous 12 months.
- 2. It meets the conditions for collective insolvency proceedings, including judicial reorganisation procedures (PRJ).
- The company must also operate in an eligible sector.
NB : Main non-eligible sectors include: oil and hydrocarbons, tobacco, arms and military/combat vehicles, fund management and investment funds, monetary intermediation, insurance and reinsurance, securities and commodity brokerage, property development, libraries, archives and museums, gambling activities
Guarantee Features
Which loans can be covered by a guarantee?
Guarantees can cover one or more bank loans, whether they are amortising (capital repayment scheduled periodically according to a predefined scheme) or non-amortising (overdraft facility, guarantee facility).
The purposes of the covered loans may include, among others:
- Working capital
- Acquisition of a business
- Fit-out works
- Purchase of real estate/movable assets
- Rental guarantee
- …
What amount is covered by the guarantee?
The guarantee granted covers only part of the amount borrowed under a bank loan, namely:
- Maximum 65% of an amortising loan
- Maximum 50% of a non-amortising loan
- If the company is exemplary in terms of social or environmental performance, the guarantee may be increased and cover up to 80% of the bank loan. Be recognised as exemplary | Brussels Economy and Employment (economie-emploi.brussels)
In all cases, the guarantee will cover a maximum amount of 1.5 million€.
Example :
For the acquisition of a business, a company requires an investment loan of 100,000 €. It also requires an overdraft facility of 30,000 €.
- For the investment loan (amortising loan), the guarantee may cover up to a maximum of 65,000 € (65%).
- For the overdraft facility (non-amortising loan), the guarantee may cover only up to a maximum of 15,000 € (50%).
What is the duration of the guarantee?
The validity period of the guarantee depends on the type of loan taken out:
- For amortising loans, the guarantee has a maximum duration of 10 years.
- For non-amortising loans, the guarantee has a maximum duration of 5 years.
In any case, the loan duration may be longer than the guarantee period.
What is the cost of the guarantee?
The cost of the guarantee is a one-off premium paid immediately after signing the bank loan agreement. It is calculated according to the type of loan:
- For amortising loans, the premium amounts to 0.75% of the guarantee amount multiplied by the number of years of the guarantee
- For non-amortising loans, the premium amounts to 0.90% of the guarantee amount multiplied by the number of years of the guarantee
Example > for an amortising loan of 50,000€ guaranteed at 65%, i.e. 32,500€ over a period of 5 years, the premium to be paid to obtain this guarantee is: 0.75% × 32,500€ × 5 (years) = 1,218.75€
If the company is exemplary in terms of social or environmental performance (see above), the premium is reduced.
Brussels Guarantee Fund & State aid?
The Brussels Guarantee Fund is an organisation of the Brussels-Capital Region whose mission is to facilitate access to business credit by providing lending institutions, in exchange for a one-off flat contribution, with a substantial part of the guarantees they require from Brussels-based companies. In many cases, without the guarantee, the bank would not grant the loan.
Its operational management is carried out by finance&invest.brussels.
The guarantee constitutes State aid within the meaning of the Regulation on de minimis aid (Commission Regulation (EU) No 2023/2831 of 13 December 2023 on the application of Articles 107 and 108 of the Treaty on the Functioning of the European Union to de minimis aid).
Funding procedure
The guarantee application is submitted exclusively by the partner banker of the finance&invest.brussels group.