The benefits of factoring for entrepreneurs

1. Liquidity

The factoring company immediately pays out a large part of the amount to be collected. So entrepreneurs no longer have the problem that debtors pay (too) late, but can immediately dispose of the money and invest it again in the organisation.

2. Capital

Organisations receive more capital through factoring than through a bank loan. As a rule, banks finance about 50 percent of the outstanding accounts, while the percentage of factorisers is much higher (70 to 90 percent).

The disadvantages of factoring for entrepreneurs

1. Privacy

A factoring company takes over almost the entire accounts receivable. Insights into the financial picture of the company help to do this. Not every entrepreneur feels comfortable when sharing annual figures with an external party.

2. Cost

The organisation loses part of the margin because part of the outstanding accounts will go to the factoring company as payment for the services. The agreed percentage often makes factoring a bit more expensive than a bank loan.

The benefits of leasing for entrepreneurs

1. Scatter

Leasing is linked to the financed object. A separate contract can be made for each object (such as machines, cars, or stock). Therefore, multiple sources of financing can be used. Besides, the costs are spread over a longer period. There is no major purchase cost item, but there is a monthly payment. So you don’t have to save long to buy a new object.

2. Owner

In the case of a financial lease, the entrepreneur immediately owns the object to be financed. This means that you can immediately benefit from the tax depreciation and the investment deduction. This is slightly different from operational leasing. With this form of leasing, the leasing company remains the owner of the object until the last installment has been paid.

The disadvantages of leasing for entrepreneurs

1. Contract

Leasing usually consists of a multi-year contract that is not very flexible. Breaking open a contract in the meantime is virtually impossible or very expensive. This may mean that when an object is replaced, payment must be made for the object that has since been replaced and the replacement. This happens, for example, when a leased machine breaks down and is replaced during the contract period. Although the broken machine is no longer used, it still has to be paid for.

2. Cost

Leasing an item is more expensive than buying the item right away. Entrepreneurs pay the lease company to spread the payment of the purchase price.

Check out SmartFunding website for more information. For advice or questions you can always contact SmartFunding on +31 85 303 56 65 or info@smartfunding.nl . You can always contact one of the SmartFunding advisors directly .  

R&D tax withholding agents

Entrepreneurs are qualified for a reduction in the payroll tax if they conduct business within the meaning of the regulations on corporate tax or employ staff who carry out R&D.

R&D tax withholding agents are entrepreneurs who manage a business that is not a public knowledge institute. They should carry R&D activities and withhold payroll taxes on behalf of their employees. Before becoming an R&D tax withholding agent, an entrepreneur should be issued a payroll tax number from the Dutch Tax and Customs Administration.

Holding company / operating company 

Both entrepreneur’s operating company and the holding company have to apply for the WBSO if their employees carry out R&D.

Tax entity 

In case a company hires employees to a third party, they fall under the WBSO only when organising the R&D work at the third party’s company. An exception to this is made for hiring in or hiring out employees. Employees may be hired in or out for R&D, for example, by an employment agency or by companies within a tax entity that carry out work on a specific project. When employees are hired in and out by companies within a tax entity, each employing company needs to submit an application.

Trainees

The R&D hours worked for the WBSO can include hours worked by trainees and students working on their graduation project. However, only if they are employed by the company and all the R&D conditions are met.

R&D taxpayers 

 A self-employed entrepreneur who manages a business within the meaning of the Wage Tax Act and works on R&D for at least 500 hours in a calendar year is qualified for an R&D tax credit. In this case, self-employed is indicated as an R&D taxpayer. A self-employed entrepreneur can submit more than one application, in case they manage a business through more than one company with R&D activities. A self-employed person cannot claim for costs and expenditures, neither can choose a fixed sum. Those entrepreneurs who hire salaried employees for R&D work can also apply for a WBSO tax credit as payroll tax withholding agents.

Contac the WBSO Software Specialist if you want to get more information about subsidies and grants for entrepreneurs in the Netherlands

Source: rvo.nl

Step 1: Intention to conduct research or development (R&D)

One of the biggest considerations in conducting an R&D project is costs. The WBSO subsidy can help you with the project funding. The WBSO lowers the cost of technical-scientific research and development, independently from the results. Almost every company in the Netherlands that plans to conduct R&D is eligible for the WBSO grant. The company can be of any size and can operate in any business industry. An application can be submitted for either of two types of projects:

• The development of technically new physical products/physical production processes/software;
• Technical scientific research.

Step 2: An application submission

The WBSO Software Specialist can guide you through the whole application process and provide support with any possible issues. Contact us for more information. 

Step 3: Organization of an administrative record system.

The administrative records for the WBSO have to emphasize the nature of the R&D activities, the content, the progress, and the number of hours of your R&D work. If your first application is for a tax credit on the basis of a fixed sum against costs and expenditures, then you are obliged to keep administrative records of the costs and expenditures actually incurred for each R&D project. If your first application is for a tax credit on the basis of a fixed sum against costs and expenditures, then you do not have to provide a separate administration of the actual costs and expenditures. You have to make sure that you keep administrative records from the very beginning of the project(s), even without an R&D Declaration on your hands.

Step 4: The application check.

After your application has been submitted, consultants from the Netherlands Enterprise Agency (RVO.nl) inspect it to verify that it is complete. In case your application is…

• Complete: you receive a confirmation of receipt and technical consultants continue with reviewing the content of your application.
• Incomplete: you get an opportunity to complement your application with the necessary information or documentation. You have to provide this information to RVO.nl in a specified time period. Your application will not be processed if you do not submit this information on time. Once your application is complete, you are issued a confirmation of receipt.

Step 5: Evaluation of the content of your application.

Technical consultants review the content of your application by looking at the projects listed in the application, and their costs and expenditures, against the relevant laws and regulations.

The positive Decision about your application for the WBSO will be issued to you together with an R&D Declaration. The Decision specifies the number of hours and, where relevant, the costs and expenditures allocated to each project.

The projects that were not approved for the WBSO are also specified and explained in this Decision. The R&D Declaration specifies the maximum amount of the R&D tax credit deduction that you are entitled to apply to the payroll tax number without sub-number (RSIN) specified, in the period to which the Declaration applies.

Step 6: Deduction of your R&D credit from your tax return.

You deduct the granted R&D tax credit from your payroll tax returns.

Step 7: Submission of an actual R&D statement.

You have to submit a statement of the actual R&D hours worked and the actual costs and expenditures incurred within three months of the end of the calendar year covered by the R&D Declaration concerned. On the basis of this mandatory statement, RVO.nl may issue a correction R&D Declaration.

Step 8: Inspection.

RVO.nl consultants may visit your business to make a retrospective inspection of your R&D work, hours worked, and any costs and expenditures against your R&D administrative records. You will get a correction R&D Declaration if any errors are identified in your R&D administrative records. However, consultants may decide to impose a fine in case of violations.

1. The mission should stand

A mission statement is the most important and powerful principle that edify managers and employees why they work for the business and what their collective goals are. Strategy and approaches can change, however, the company’s mission should stay consistent.

2. Leaders have to stay open-minded during a crisis

The whole economic environment will change significantly as a consequence of the coronavirus pandemic. Therefore, leaders need to stay open-minded and come up with innovative solutions.

The post-crisis environment will require updated corporate strategy processes and business partners for a company to stay competitive. It is the leader’s responsibility to invent a competitive game plan.

3. Determination is a source of benefits

The coronavirus crisis became a major challenge for companies. They are losing their clients and have limited operation capacities. Nevertheless, a health crisis merely represents one obstacle out of many hundreds that a successful company should be ready to face. Other big threats, for example, can be financial liquidity, technology failure, and operations failure.

However, it is important to remember that business based on passion is fuelled by determination. The crisis is not fatal with smart planning and confidence. It can even improve the way a company operates and relations inside the team.

Crisis setting forces managers and employees to be more creative, to cut needless costs and to focus on active improving the customer segment. As a result, companies should become leaner and meaner, obtain a new ability to outperform rivals with innovative strategies after the crisis setting has gone.

1. Curate sources of your updates

A constant flow of information about the Coronavirus can make you very unproductive. Thus, try to limit your news alerts and keep up only with the most relevant ones. In this way, you will be able to save your nerves and the nerves of your business.

2. Use your social channels for good news

This is a difficult time for the whole world and unfavorable news is covered daily in all the broadcast channels. As a business, you can use social media and give a positive vibe to your audience. Think about the warming moments, success stories, heroes, leaders that you can share with people and make them feel happier and closer to your brand.

3. Educate yourself

Use this variety of online educational sources to expand your entrepreneurial knowledge about the crisis, finance, marketing and new business strategies that can be tested after the time of distress.

4. Forecast your risk

It is important to create a possible scenario of the outcomes for your business. Consider the worst-case scenario and work from it. What can be the most vulnerable aspect of your business? What measures can be taken to avoid it? How to fix it in case of emerging? You should be set up with all the necessary steps in terms of redundancies, cost-cutting and predictive mapping.

5. Reduce your expenditures

Cost-cutting should be done today. Eliminate any non-essential subscriptions, reduce online sponsored posts, minimize travel, pause any large costs that could be undertaken later on.

6. Do not rush with firing decisions

Employees still have notice periods and can claim unlawful actions if you are not careful. Redundancy is a painful decision that should be considered as the last resort. Ask your team and staff members if they voluntarily wish to compensate a pay cut or explore if they agree to donate back to the business their upcoming holiday. You can consult with free legal advisors that work with employment law or HR about the best decision for your company by phone.

7. Over-communicate with your team

Remote working can be successful; you just need to keep the team spirit. Talk with each other daily, update with news, organize online activities, organize group video talks. Besides, keep all your social channels active and ensure that your team has a clear route through them with a daily plan of action.

8. Explore the opportunities

Flexible working is an opportunity to demonstrate teamwork and test new strategies. Although this feels hard and fast, the advantage of working from home can introduce new ways of working within the company.

9. Work together

We are all together in this. There are no correct ways of doing things and there is no definite outcome. It is stressful, unknown and difficult. However, you should stay patient, thoughtful, attentive, and work with people, not against them. If there was ever a time to lean this, it is now.

The State Secretary Keijzer explained: “The BMKB can be used by companies for a bridge loan or overdraft (the amount that they are allowed to overdraft). The expansion is essential for the liquidity of smaller entrepreneurs who miss out on income or production due to the Сoronavirus. The suppliers, travel agencies, but also companies that can no longer obtain raw materials from abroad”.

The government estimates that with this first step, € 300 million in additional financing will immediately be made available to SMEs that are affected by the Coronavirus. The extension will take effect from Monday, March 16, 2020, and will be a part of a package of measures already announced last week by the government to deal with the economic consequences of the Coronavirus. Entrepreneurs affected by the corona issue can also apply for working time reduction and postponement of payment/reduction of provisional assessment of taxes. Self-employed people can appeal to the Self-employed Assistance Decree (BBZ).

The SIDN fund grant provides money to projects that work on innovative ways of using the Internet. The Fund contributes to prosperity and welfare in the Netherlands by supporting innovative ideas in the data world.

Project in the idea phase. Focused on the elaboration of a promising idea to a demo, pilot or experimental design. A good idea that can be brought to the next phase by a strong team. The maximum contribution is € 10,000 per project. Applicants can submit a Pioneer project proposal during the whole year.

A project with demonstrable potential, supported by a proof of concept. Further development and scaling up a promising, working concept or translation of scientific research into a usable application, with the potential for sustainable further development of the project. Potentials projects are projects that aim to upscale a working prototype into a useable application with significant potential. Contributions are up to € 75,000 per project.

If you are an entrepreneur who works in the tech field, you can apply for the SIDN Fund subsidy! You can find more information about the fund, deadlines and required criteria on sidnfonds.nl. Contacts us if you wish to apply for this subsidy directly. Or if you have any questions about the application procedure. Our specialists always available to answer you. m: info@wbso-software.nl p: +31 6 27 09 59 24 Make an appointment with the online calendar: https://calendly.com/nickreineman