The goal of innovation and development may seem like growth and expansion, but there is an essential difference, and that is mainly in the risk. With growth and expansion you have a proven business model with proven income. A financier considers the risk of this lower and therefore dares to give a business loan to you as an SME entrepreneur easier. Getting funding for innovation and development is not impossible, but it is more difficult. Because it is very important that Dutch SMEs continue to innovate, there are also various forms of financing that focus specifically on this.
Perhaps the first thing that you as an entrepreneur think of when you have a new idea to go to the bank for a business loan. However, it often proves difficult to receive business financing for this purpose. This is because a bank or other financier finds it difficult to assess the risk. After all, it is often something new that has yet to prove itself and that means increased financial risk. A financier will wonder whether you as an entrepreneur can repay the interest and repayments on the loan, and whether the innovation will yield a return on investment. If the financier or bank already makes a loan, the interest rate is often higher. In order to ensure that Dutch entrepreneurs continue to innovate, various subsidy schemes have been created by the Dutch government. If you, as an entrepreneur, start working on innovation and development, do not forget to look at these schemes. Perhaps the biggest example is the WBSO subsidy.
The government is also aware that innovation credit is often harder to find for entrepreneurs. Because financing for your innovations can sometimes be difficult, the government tries to stimulate this with schemes for innovation financing. Among other things, the innovation credit and early-stage financing are forms of business loans that are used by many entrepreneurs. These government schemes also often offer favorable conditions and market-based interest rates. The repayment of these loans is often linked to the innovation, which can lower the risk for the entrepreneur.