Export subsidies help SMEs but "you have to hustle"

A subsidy can give you a big boost if you want to start exporting. In this article, two experts show you how to get around in the world of subsidies.

Free money

“Subsidies? That means free money for the taking.” Wessel de Vries, a specialist in international business at Ynbusiness in Friesland, hears that all the time. Yet the reality is a bit more complicated, he says. “There are fine schemes, and you do get money, but in the process, you commit to a number of conditions and ground rules. You really need to mean business: stand by your word, be accountable, and invest time, energy, and money.”

Bert Beverdam, Managing Consultant at subsidies consultancy PNO, agrees. “Applying for a subsidy can be complicated. You have to follow certain procedures and there are deadlines to contend with. On the one hand, you have to stay within the legal frameworks. On the other, you must be creative so you can align your plans with the subsidy you are after.”

Always consider applying for a subsidy carefully, advises De Vries. A minor deviation form the conditions may lead to a rejection. "If you are seriously interested in exporting, you prepare well. A complicated application process will not make you put a subsidy to one side." 

“Exporting is not something you just do on the side. Even with a subsidy, it is your motivation and choices that make the difference between success and failure. So, before you go international, make sure your business is ready. With or without 'free money'." 

After the crisis

De Vries saw a sharp decline in interest in exporting among business owners when the COVID-19 crisis first struck. “Experienced SMEs got hit here and there, while start-ups shelved their plans.” He now sees plenty of initiative again. “Start-up exporters have now got going.”

But while international trade has largely recovered, a lot of companies are still finding the going tough. Business owners are struggling with high costs, long delivery times and staff shortages. And subsidies are not readily available to help with those specific problems. However, they are when it comes to tapping new markets according to De Vries. “For example, if you want to enter another market because you can no longer do business in Ukraine or Russia, you can get help from Support International Business (SIB). Within that scheme, you can apply for funds for things such as coaching or help with your start-up in a new market.”

De Vries believes an export subsidy offers a business many advantages. “You get money, so you have to invest less of your own equity. That means you run less financial risk. That puts you in a stronger position and will make it easier for you to take our an additional from your bank. You will also get an edge over the competition, because you can keep your product-development costs down, for example. That will mean lower sales prices. Finally, you can expand your network by collaborating with knowledge institutes, governments, market players and companies.”

Applying for an export subsidy

Bert Beverdam sees that, with tight budgets, limited openings and stringent requirements, it is getting harder to win subsidies. “Applying for export subsidies is not ‘business as usual’ for most companies,” he says, “So it takes them quite some time, and the chances of success are not always that high. Their success rate goes up when they use experienced consultancies. Subsidy providers look at each application with a professional eye and a lot of knowledge. That is why it is still worthwhile to submit applications for subsidies.”

You can also apply on your own for export subsidies “That is an option specially when the amounts involved are smaller,” says de Vries. “Those applications can sometimes be done and dusted in a few hours.” Like Beverdam, he suggests bringing in a specialist if the amounts involved are larger and the application procedures are more complicated.

Getting started

With these tips from Beverdam, SMEs business owners can get straight to work on their subsidy applications:

• Check this overview of subsidies and schemes. It includes both national and international subsidies.
• Is your business really an SME? Take the European Commission's SME test 
• Sometimes an application has to be submitted in short order. In fact, some subsidy pools operate on a “first come, first served” basis. In other cases, the number of applications is so large that the budget dries up fast. Make sure to give your application all the attention it needs, even if you are in a hurry.
• Check in advance whether you need eHerkenning. This electronic identification system is used by many institutions that offer subsidies schemes.
• Make note of the validity periods for vouchers and schemes. Communicate to subsidy providers any changes or extension requests your business would like to make.

Export subsidies

If you do business abroad, or want to start, you may be interested in these 4 subsidy schemes.

1. Support International Business (SIB)

SIB can help you get started as an exporter or when you are entering a new foreign market.

2. Dutch Good Growth Fund (DGGF)

The DGGF supports you with loans, setting up foreign subsidiaries, export-credit insurance, and export financing in emerging markets and developing countries.

3. The Dutch Trade and Investment Fund (DTIF)

The DTIF gives you a leg up if you want to do business abroad and are looking for funding. This subsidy applies to all countries except those covered by the DGGF.

4. Demonstration projects, feasibility studies, and investment preparation projects (DHI)

The subsidy DHIscheme supports business owners who want to invest in a business or convince potential buyers of their technology, product or service.