Finding your way through the maze of Belgian aid measures available to businesses in times of COVID-19

BE Law
EU Law

In order to help companies in these dire times of COVID-19, Belgium’s federal and regional governments have provided an arsenal of aid measures. Sophie Van Besien, Michèle de Clerck and Peter Wytinck provide an overview.

1. Federal level

1.1 Loan guarantee scheme

On 11 April 2020, the European Commission approved the Belgian loan guarantee scheme in response to the COVID-19 crisis set out in the federal statute of 27 March 2020 and the accompanying Royal decree of 14 April 2020.

The loan-guarantee scheme has the following characteristics:

  • It involves a total maximum guarantee amount of EUR 50 billion;
  • All new additional credits and credit lines, with a maximum maturity of 12 months granted between 1 April 2020 and 30 September 2020 will be covered by the guarantee scheme. By way of exception, the guarantee does not cover refinancing loans and undrawn amounts of existing credit lines;
    The aid is available to all viable non-financial companies active in Belgium (also non-incorporated), including self-employed traders, small and medium sized enterprises (“SMEs”) and large companies;
  • The principal amount of the guaranteed loan can, in principal,1 not exceed EUR 50 million or the borrower’s liquidity needs for its activities during maximum 12 months (or 18 months for SMEs, including self-employed traders);
    The maximum interest rate is 1.25% (excluding fees). The fees due cannot exceed 0.25% for SMEs, and 0.50% for larger companies;
  • The guaranteed credit can only be used to finance a company’s Belgian operations or its qualified foreign operations to the extent that such use is limited to 10% of the guaranteed credit and such use is not to the detriment of the Belgian operations;
  • After the end of the guarantee scheme, the amount of losses incurred on the credits under the guarantee scheme will be assessed. The burden sharing between the financial sector and the public sector is as follows:
    • The first 3% of losses will be borne entirely by the financial sector.
    • For losses between 3% and 5%, 50% of the losses will be borne by the financial sector and 50% by the government.
    • For losses higher than 5%, 80% of the losses will be borne by the government and 20% by the financial sector.

At first glance, it appears that, in general, the requirements are similar to the requirements set out in sections 3.2 and 3.3. of the European Commission’s Temporary Framework, i.e., no apparent link to the size/turnover. However, as to the duration, the Belgian scheme (1 year) is less extensive as provided for in the Temporary Framework (1-6 years). For more information, see our short read on the Temporary Framework.

1.2 Payment deferral of existing corporate loans and credits

In addition to the federal loan guarantee scheme set out above, the Federal State describes the conditions of a payment deferral of existing corporate loans and credits such as term loans, evolving loans, and others with the exception of leasing and factoring arrangements.

Non-financial companies, SMEs, self-employed individuals and non-profit organisations can request a deferral of payment of up to 6 months. Interest will remain due and payable. The term of the credit agreement will be extended with a period equal to the length of the granted deferral period (i.e., a maximum extension of 6 months).

Companies can apply for a deferral of payment if they meet four conditions:

  • (i) The company is no longer able to meet its payment obligations due to the impact of the COVID-19 outbreak, reflected by, e.g., a decrease of turnover;
  • (ii) The company has a permanent establishment in Belgium;
  • (iii) The company has no arrears on its current credits or on its tax or social security contributions on 1 February 2020; or the company has less than 30 days arrears on its current credits or on its tax or social security contributions on 29 February 2020;
  • (iv) The company has complied with all its contractual obligations towards its credit institutions during the 12 months prior to 31 January 2020 and is not involved in a debt restructuring process with its creditors.

2. Regional level

In addition to aid measures offered on the federal level, there are also numerous aid measures available on the regional level. Where the aid measures qualify as State aid, they must be notified to and approved by the European Commission. Currently, only the Flemish COVID-19 guarantee scheme was notified to and approved by the European Commission. It is possible that other regional measures will have to be notified as well, e.g., the Flemish subordinated loans scheme.

2.1 Flanders

(a) Corona nuisance or compensation premium

Companies affected by a complete closure of their physical location in accordance with federal guidelines can receive a one-off nuisance premium of EUR 4,000. For each day of closing after 5 April 2020, companies can receive an additional premium of EUR 160 per day.

In addition, the Flemish government introduced a compensation premium of EUR 3,000 for companies that are not obliged to close but suffer from a large loss of turnover, e.g., companies that provide food services, such as praline shops. To benefit from this measure, the company's revenue loss should be at least 60% compared to the same period last year. The reference period is 14 March 2020 to 30 April 2020.

Companies can request the premiums from the Agentschap Innoveren & Ondernemen (“VLAIO”).

(b) Extension of crisis guarantee

For companies that, as a result of the COVID-19 crisis, are unable to pay their personnel, purchase raw materials or pay invoices, the Flemish government wants to make it easier to find financing for their working capital from banks by extending the already existing guarantee scheme.

Under the existing guarantee scheme, companies that are unable to conclude a financing agreement due to a lack of sufficient guarantees can have up to 75% of the commitments covered by the Flemish government in exchange for a one-off premium of 0.5% of the total amount. Following the COVID-19 extension (EUR 100 million), this premium is reduced to 0.25% of the total amount. In addition, companies can have a bridging loan guaranteed for existing non-banking debts for up to 12 months instead of 3 months.

To make use of the extension, companies have to contact their bank or leasing company.

(c) Incentive bonus for employees

The Flemish incentive bonus that already existed to encourage employees to work part-time in order to avoid layoffs is now extended to companies that, because of the coronavirus crisis, experience a substantial decrease of at least 20% in turnover, production or orders in the month preceding the interruption compared to the same month in the previous year. The monthly premium for the employee is between EUR 68 and EUR 172. The extension only applies for the period from 1 April to 30 June 2020 and can be requested online.

(d) Subordinated loans

On 1 April 2020, the Flemish government approved a capital increase of EUR 250 million to grant subordinated medium-term loans in the context of the Corona crisis.

Participatie Maatschappij Vlaanderen (“PMV”) provides subordinated loans with a term of 3 years. The measure is only available to SMEs (with a focus on start-up companies and scale-ups) that did not have financial problems prior to the crisis and, in the short term, bring their effective employment to a minimum of 80% of their workforce or retain their workforce at work.

(e) COVID-19 guarantee

Gigarant offers a modified COVID-19 guarantee to companies that were not in difficulty on 31 December 2019 for a maximum duration of 6 years. The scheme covers both working capital and investment loans. The cash premium to be paid for the COVID-19 guarantee is reduced compared to the normal Gigarant premium. The amount of COVID-19 guaranteed funding per company will be temporarily limited in accordance with European regulations (double the total annual gross wage bill for 2019 or 25% of the total turnover 2019 or, subject to appropriate justification, the liquidity requirement for the next 18 months for an SME and for the next 12 months for a large company).

Files that fall within the scope of the federal 'corona' agreement are excluded from this Gigarant-guarantee. In other words, the Gigarant guarantee is a second line instrument that will come into play only if at the federal level a guarantee cannot be granted.

The European Commission approved the guarantee scheme on 9 April 2020 under the Temporary Framework.

(f) Tourism support measures

A budget of EUR 5 million has been made available for youth and social tourism. In addition, this year Tourism Flanders will not collect rent from its youth hostels, a measure worth EUR 1 million. The conditions of these support measures are currently being further elaborated by Tourism Flanders.

(g) Support measures for agriculture and horticulture

For the sector of agriculture and horticulture, specific aid measures are available:

  • Vlaams Landbouwinvesteringsfonds (“VLIF”) guarantee scheme of up to 80 % of the eligible credit amount for agricultural holdings with a gross operating result of at least EUR 40,000 per farmer;
  • Relaxation of certain administrative obligations;
  • For the dairy sector - extension of the mandatory collection period of two days for AA milk by three days;
  • Accelerated payment of the 2018 drought files;
  • Emergency fund horticulture.

(h) Flemish tax measures

To conclude, the Belgian tax administration also provides a whole range of aid measures:

  • Deferment of property tax for companies;
  • Deferment of payment of annual road tax;
  • The flexible granting of repayment plans for, e.g., post-recovery of registration tax; and
  • Extension of time limits to meet tax obligations for inheritance tax and registration tax.

2.2 Brussels

(a) Lump sum compensatory allowance

Companies active in certain business sectors (e.g., retail, lodging and food services) that were required to close down following decisions adopted by the National Security Council can request a one-off premium of EUR 4,000. The allowance is only available for companies that have at least one operations office in the Brussels-Capital Region and employ fewer than 50 full time equivalent employees. The limit is per company and not per business unit. The application for the allowance must be submitted to the Brussels Economy and Employment (“BBE”) before 1 June 2020.

(b) Public guarantees

The Brussels region offers support to relieve cash-flow issues faced by companies affected by the corona virus, through the granting of public guarantees (via the Brussels Guarantee Fund) for bank loans, for a total of EUR 20 million. The Funds' intervention is limited to 80% of the amount of the loan and only available for micro companies and SMEs that invest (in the broad sense) within the territory of the Brussels-Capital Region. The guarantee is not available for large undertakings.

(c) Others

  • Suspension of the tax on tourist accommodation businesses (Citytax) for the first half of 2020;
  • Reduced interest loans to key suppliers in the hospitality sector enabling them to offer deferred payment options to businesses in the hospitality sector, and for hospitality businesses employing more than 50 people;
  • Moratorium on capital repayment of loans granted by Finance& to impacted companies on a case-by-case basis;
  • Accelerated or even early processing, commitment and liquidation of expansion aid for the hospitality, tourism, events and cultural sectors;
  • Reinforcement of support for companies facing difficulty by increasing the allocation to the Centre for Companies in Difficulty (“CED”) by EUR 200,000;
  • Simplification of temporary unemployment.

2.3 Wallonia

(a) Lump sum compensatory allowance

Companies active in certain business sectors (e.g., retail, lodging and food services) that were obligated to close down following decisions adopted by the National Security Council can request a one-off premium of EUR 5,000. The allowance is only available for micro and small undertakings and has to be requested online from the Public Service of Wallonia within 60 days after closing.

(b) Current loans from regional agencies

The payment of principal and interest on loans and the financial aid offered by the regional agencies SRIW, SOGEPA GROUP and SOWALFIN at the maturity date of 31 March 2020 is deferred. The principal amortisation schedule is automatically deferred for an equivalent period.

The measure will be carried out without any additional interest or charges to be borne by the company for all loans with an outstanding amount of less (or equal to) EUR 2.5 million. For loans with a higher outstanding amount, the question of interest will require an individual examination of the file in consultation with the banking and financial partners concerned.

(c) Additional guarantees and loans

The regional agencies SOWALFIN - SOFINEX - GELIGAR may grant additional guarantees of up to:

  • 50% on existing short-term lines granted by banks initially without guarantee, in order to make it possible to maintain these financial means at the disposal of the companies affected by COVID-19 measures.
  • Max. 75% on the increases in short-term lines that would be granted to companies to help them get through this period of disruption.
  • Max. 75% on new short-term credit lines to enable companies to benefit from additional cash resources.

For companies in turnaround, SOGEPA can guarantee 75% of a maximum amount of EUR 2.5 million per beneficiary. In order to claim the guarantee, an application must be submitted directly to SOGEPA.

In addition, to meet the urgent cash flow needs of companies, SOGEPA and Wallonia Santé can grant loans for a maximum amount of EUR 200,000 with a 1-year grace period and a fixed interest rate of 2%.

(d) Aid in support of cultural enterprises

The Wallonia-Brussels federation (“FWB”) has approved the launch of an emergency loan for cultural and creative enterprises, i.e., enterprises that create, develop, produce, reproduce, promote, disseminate or market goods, services and activities with a cultural, artistic and/or heritage content.

The loan is available for a period of 6 months (possibly renewable for 6 months) for an amount of EUR 20,000 to EUR 100,000 with a fixed interest rate of 2%. The governmental agency St’art will carry out an analysis in order to verify the repayment capacity and confirm the activation of the other support measures (federal, regional, community).

In addition, companies can request a moratorium on outstanding loans (interest and capital).

(e) Water bills

Companies faced with cash flow problems can request the Walloon Water Company (“SWDE”) for a spread out of their water bills.

(f) Support measures for the health, social and employment sectors

An amount of EUR 15 million has been set aside to support the health, social and employment sectors. The Government of Wallonia has opted for three types of aid that will be broken down and adapted according to the sector: (i) exceptional bonus; (ii) retention of subsidies; and (ii) lump sum compensatory allowance.

The sectors that have to take on additional activities (mainly health and front-line players: hospitals, rest homes, social sector and disability support) will receive an exceptional sum of EUR 75 million.

Certain subsidised sectors, which face a reduction or even cessation of their activities, will be able to maintain their subsidies. This concerns certain health sectors but also socio-professional training, including the service voucher sectors.

For the sectors that will lose the revenue of the beneficiaries of their services an additional lump sum payment of EUR 5,000 is foreseen.

(g) Delays and leniency in regional procedures

Certain flexibility and leniency will be applied in relation to existing commitments between companies and the Walloon Region within the framework of regional procedures (applications for premiums, subsidies, etc.). These criteria and commitments may relate to a target in terms of jobs, a deadline or period for repayment of aid, etc.

Companies have to demonstrate the impact of COVID-19 on their activities and the SPW department will examine each situation on a case-by-case basis.

This article provides some general insights on different legal questions. These insights do not constitute legal advice and may not be relied upon as if they were legal advice. The outcome of any legal analysis will strongly depend both on the specific facts and circumstances of each case and on the particularities of the sector and legal relationship involved. Our legal experts in the various domains concerned are available to assist you with the analysis of your questions and provide specific advice tailored to your case and circumstances.


[1] The King can, at the request of a borrower allow a deviation from the EUR 50 million maximum amount.