Investing in Wallonia | Setting up a business| Finance

sources of finance

With numerous sources of finance to choose from, obtaining finance for suitable  projects in Wallonia is not a difficult task.

bourse de prÉactivitÉ (enterprise feasibility grants)

In 2001, the Wallonia Region set up a special enterprise feasibility grant mechanism (bourse de préactivité). The purpose of this scheme is to enable business entrepreneurs seeking to develop their project in Wallonia to finance their initial project setup costs (project evaluation and setup, travel, consulting, intellectual property, documentation, equipment required to set up project etc.).

The grant is set at a maximum of 12,394.68 euros (or 15,493.34 euros fully financed if the recipient stops working in order to concentrate exclusively on his business plan). A supplementary grant is also possible.

Banks

There is a particularly wide and flexible range of loan products on offer to companies, with no discrimination as to the nationality of the investor. Thanks to an efficient branch network, there is a large number of Belgian and foreign banks servicing the entire region. There are more than 121 branches of international banks in Belgium, for example HSBC, ABN Amro, Bank of America, BNP Paribas, Citibank, Commerzbank,Deutsche Bank, ING, JP Morgan Chase, State Street Bank, the Bank of New York, UBS, Sumitomo Mitsui etc.

Because of the volume of international business carried out in Belgium, more than half of all banking transactions are international financial transactions. The majority of Belgian banks also have an extensive international network based on strategically located branches in the main financial areas across the globe.

Fonds de Capital d'Amorçage (seed capital fund)

The Fonds de Capital d'Amorçage (FCA) or seed capital fund specialises in the financing of companies at the start-up or expansion stage. Finance (up to a maximum of 125,000 euros) is provided in three main forms:

• Majority or temporary equity stakes (risk capital or venture capital)
• Unsecured loans at preferential rates
• Subordinated loans

Fonds de participation (Social cohesion FUND)

The Fonds de participation is a public federal financial institution that supports and promotes the entrepreneurial spirit by following a two-stranded socio-economic objective:

• To facilitate access to bank loans in the case of self-employed entrepreneurs, professionals and small companies at the start-up, expansion or conversion stages,
• To combat unemployment by granting loans to individuals who are seeking work and want to set up their own business.

The institution intervenes in various different ways:

• Co-financing: Professional loans shared between the bank and the Fonds de participation,
• Starteo loans: Aimed at self-employed workers or SMEs who are in the process of setting up or who have been in business for a maximum of 4 years,
• Optimeo loans: Geared towards companies at the expansion stage,
• Micro-finance loans: Micro loans with professional support used for financing independent job creation,
• Lancement loans: Start-up loans aimed at individuals who are not in employment and want to set up their own business,
• Solidaire loans: "Social cohesion " loans aimed at disadvantaged individuals who want to develop a self-employed business activity,
• Plan jeunes indépendants: Restricted to young self-employed entrepreneurs under the age of 30 who already have a business plan. Co-financing of risk capital: A supplementary loan is available to business angels and entrepreneurs,
• Business Angel+: Innovative companies that are starting up or expanding through the support of a business angel.

Business Angels

Business angels are private entrepreneurial investors, company directors or managers from private and public sectors with a vast range of experience in the management of companies and who accept the risk of investing sums in young companies to the order of 25,000 to 250,000 euros. Business angels also share their experience and entrepreneurial abilities as they guide entrepreneur(s) through the process of implementing their business plan.

Useful links:

- WABAN (tool used for sourcing the finance required to set up or expand innovative companies on the basis of introducing Business angels to potential entrepreneurs),
- BAMS (provides entrepreneurs a methodology for creating attractive business plans and includes examples of different Shareholder plans).

Sowalfin - regional guarantee fund

Within the framework of expanding the business activities of companies in the SME/VSME sector, the Sowalfin guarantee fund for the Wallonia region can help with the financing issues facing very small and small- to medium-sized companies through the granting of subordinated loans as a supplement to medium-term bank loans. The interest rate applied to subordinated loans is 2 percentage points less than standard bank loans (currently set at 3.75% for a loan over a period of x years).

Loans requested from the SOWALFIN fund must be used as an investment or as a means to increasing working capital. The fund can also stand as guarantor for bank loans granted to companies in the SME/VSME sector. By intervening in this way, Sowalfin makes it easier for companies in the SME/VSME sector to gain access to loan finance.

" invest" support BODIES

The objective of such "Invest" companies is to support the creation and expansion of SMEs as well as the creation of stable employment in the assigned area (in general this refers to the province).

These support bodies intervene in the form of financial assistance, with the emphasis on long term financing techniques:

• Minority equity stakes with buy-back commitments,
• Debenture loans that can be converted into equity,
• Subordinated loans.

This intervention is financed by joint capital provided by both the Wallonia Region and private companies. There are currently 9 "Invest" bodies covering the entire region of Wallonia.

The Wallonia Region has entrusted SOWALFIN with the task of coordinating "Invest" actions. Fonds de Venture Capital: This venture capital fund is intended for capital investments in a business plan or in an existing company with considerable development potential.
Its principle is simple: Investors provide capital investments, accepting all of the risks associated with the respective business plan, and in return, they are remunerated on the basis of capital gains achieved at the time of reselling their equity.

HoldingS

Holdings are companies whose assets mostly consist of shares in other companies and who conduct financial transactions of relevance to these companies, while also carrying out their own industrial and commercial activities.

The most well known holding companies in Belgium are CNP, Ackerman Van Haren, la Floridienne etc.