New developments on the “helping hand” loan front

Following the success of the initial version of the “helping hand” loan introduced in September 2016, the Walloon legislator made use of this scheme to support the economic recovery in Wallonia. The conditions and procedures have therefore been revised so as to extend the scope of the measure in 2021 and 2022.

The loans must be granted by natural persons who live in the Walloon Region and who are not related to the borrower as a shareholder, employee, manager, or similar position of a legal entity borrower, or as a spouse or legal cohabitant of an independent borrower.
The borrower must be an SME, a natural person or legal entity in commercial form, whose place of business is located in the Walloon Region and is in a line of business other than real estate or financial activities. Management companies, listed companies, companies resulting from a merger or demerger and those that make a building available to a manager are also ineligible. Finally, the borrower cannot have carried out a capital reduction or a dividend distribution.

The loan is concluded for a period of 4, 6 or 8 years, and even up to 10 years depending the latest amendments, and is subordinated to the existing and future debts of the borrower. Derogations allow the loan to be called in certain situations of financial difficulties suffered by the borrower. Recent amendments have also provided for the option of repaying the entire loan in advance on the one hand, and the intervention of the Region by granting of a 30% tax credit in the event of permanent loss of capital.

The capital thus lent must be allocated to carrying out the company’s activity. It can consequently not be distributed in the form of dividends or capital, or be reinvested as capital in a legal entity controlled by the same persons as the borrower.
The capital lent was initially limited to €100,000.00 per borrower and €50,000.00 per lender. These limits have been raised to €250,000.00 and €125,000.00 respectively. The interest must be between a minimum of half the legal rate and a maximum of the legal rate in force, i.e. 1.75% for 2021.

The loans are concluded by private deed and are to be registered here: http://www.pretcoupdepouce.be/introduire-une-demande. The registration period is 3 months as of the date the funds are made available.

The tax relief granted to the lender is a tax credit equal to 4% of the amount lent for the first 4 years of the loan, then 2.5% of the amount lent during the following years.

Finally, it should be noted that this loan is compatible with a loan granted directly by SOLWALFIN.

You will find all the detailed information on the Region’s website: http://www.pretcoupdepouce.be/

If you are interested in such a “helping hand” loan, ODB will be happy to assist you with your application! ”

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