Potential entrepreneurs have quite a few options in terms of funding, and most of those available come from the EU Cohesion and Structural Funds. According to official statistics, private credit institutions do not trust start-ups.
State intervention in support of the launch of new businesses, is limited to the SRL-D program and fiscal incentives such as: low income tax, non-payment of VAT if the income does not exceed 35,000 euros/year or the tax exemption for the establishment of a limited liability company.
The SRL-D program
The program for the stimulation of the establishment and development of micro enterprises is a program that provides funds although not very large (with a limit of 10,000 Euros) proves to be extremely useful for young entrepreneurs. Through this program are offered facilities for new micro-enterprises, founded by young entrepreneurs working, for the first time, in business through a limited company – according to Law 97 of 2014. The limited liability company is named in this program SRL debutante, hence the abbreviation SRL-D. The program will be operational by 2020 and it is expected to have at least 550 beneficiaries, every year.
Another important aspect is that this program offers other benefits, such as:
- guarantees for loans up to a maximum of 80% of the loan amount requested up to 80,000 euros;
- exemption from social security contributions paid by employers for income earned for time worked for maximum four employees (permanent employees);
- exemption from registration fees for operations at the trade registry for registration of microenterprises;
The SRL-D program is the best option available for women entrepreneurs, is much safer and easier than attracting private investors.
The access to financial services, credit or tax exemptions has been drastically reduced by the economic crisis that began in 2008. Greece’s economic structure is based on tourism, services and public sector jobs. The first sectors affected by the economic crisis, were services (particularly financial and commercial sector) and tourism, by decreasing the number of customers. Gradually the problems have spread to the individual level, affecting domestic consumption and resulting in bankruptcies, restructurings and rising unemployment. State intervention was materialized by reducing public spending and introducing austerity measures that generated major social issues. Tax increase was followed by a massive restructuring of labor, which led to an escalation of already existing social problems. An important cause of this situation was the lack of a clear and coherent framework for measures to stimulate economic growth and create jobs.
The crisis had a major impact upon the real economy and led to tighter credit conditions, declining demand and trade, and a decrease in access to finance. Therefore many businesses have shifted from long-term development plans, to short-term survival strategies.
There is some evidence that women entrepreneurs may find more difficulties in accessing the credit market compared with firms owned by men. Women-owned firms can be considered risky by banks because they tend to be smaller, less growth-oriented and active in less profitable sectors.
GUARANTEE FUND FOR FEMALE ENTREPRENEURSHIP – Department of Equal Opportunities at the Presidency of the Council of Ministers, the Ministry of Economic Development, Trade Association and the National Bankers Association signed in 2014 a memorandum of understanding to facilitate access to credit for SMEs and self-employed women.
The banks that joined the protocol established a specific ceiling for new investments and for starting new activities, which will benefit from the State guarantee of last resort, due to the Special Section of the Central Guarantee Fund for women entrepreneurs. The dedicated ceiling will be used for credits related to certain lines of action:
– ” We invest in women ” – loans aimed at new investments, tangible or intangible, to develop activities of a business or profession;
– ” Women in start- up” – funding aimed at encouraging the creation of new businesses;
– ” Women in Recovery ” – loans aimed at promoting the recovery of SMEs and self-employed workers who, because of the crisis are temporarily passing through difficulties.
The New Business Promotion Act helps start-ups and those who have taken over companies in saving start-up cost. All are exempt from court and stamp fees, federal administration fees, land transfer tax, capital duty and stock exchange turnover tax, all of which are set out when the new business is established or takeover by successors. To apply, the new owner must not have worked as an independent business within the same sector in the last 15 years. In addition it must also have attended a counseling session on start-ups, with specific interest group.
Various federal and/or local funding are available to existing companies and start-ups. These funding programs and assistance are geared towards investment needs and specific financing (growth, research and development, innovation, technology). Examples: financing programs for young entrepreneurs, business start-up savings plans, guarantees and business start-up funds.
The access to financial instruments in the Netherlands is marked by the following milestones:
– Seed Capital for Technostarters provides financial support for SMEs in 2012 as part of the Global Program for Supporting SME Innovation 500 million which aims at supporting start-ups who focus on technological innovations (Seed, 2012)
– The BbZ Program (BbZ) is there to help individuals in social situation. This regulation supports people to open a start-up or continue with their start -up or continue as entrepreneurs. (2004)
– Dutch organization for SMEs (2015) provides financial advice to entrepreneurs/starters via twelve lending coaches. These coaches seeks to provide objective and independent advice for women with questions about entrepreneurship, finance and credit opportunities.