It is expected that in the near future the number of self-employed persons with financial problems due to the coronavirus crisis will increase significantly. They will no longer be able to stay afloat if government aid stops. Experts warn that municipalities are in a mess with financial support, which portends serious problems for entrepreneurs who are increasing their debts.
SchuldenlabNL and Deloitte have calculated that this year between 307 and 000 entrepreneurs will lose their income over the long term. Tens of thousands of people will be added next year. The researchers warn that the loss of income will lead to more serious problems and debt.
But easing the burden of entrepreneurs' debt has not been easy since 2012 due to the lack of clarity in the law. Therefore, in recent years, many municipalities do not consider it their task to help self-employed persons. Instead, they propose to close their company with the Chamber of Commerce and then turn to them for help as a private individual.
"It should not be. Municipalities have been required to offer assistance for the debts of entrepreneurs since 2012,” says a representative of the anti-collection organization NVVK. This is also stated in the Law on Debt Assistance for Municipalities, but the explanatory note to the law creates confusion. This is why former Secretary of State at the Ministry of Social Affairs and Employment Van Ark ratified it before leaving: “On 1 January 2021, the law will be amended to also focus on debt relief for entrepreneurs. Any ambiguity in this case should disappear."
The confusion of recent years has led to the fact that municipalities still do not have branches for financial assistance to entrepreneurs. They are just starting to do this. For example, in Arnhem, a pilot project started on July 1. “We expect an increase in the number of entrepreneurs experiencing money problems,” says Martien Lowers, employee of the debt service department. “We already had plans to help entrepreneurs with debts during the corona crisis. We can help about a hundred entrepreneurs this year.”
If there are more debtors, the municipality of Arnhem hopes that the Dutch government will allocate additional financial resources. “We don’t have enough money for everyone,” Lowers says. “Without government help, we will have to make a choice or stop doing something else.”
According to some, the knowledge and labor shortages in many municipalities are so great that they simply cannot be addressed. “Even if thousands of people were hired, municipalities would not be able to cope with the current growth,” says Sadiq Harchaoui from SchuldenlabNL.
Therefore, together with other debt relief associations, SchuldenlabNL is investigating whether the solution would be to buy back the entrepreneurs' debts by a fund. This fund will have to buy up the debts of small entrepreneurs and citizens who faced problems during the coronavirus crisis.
It is good that official organizations and business unions have noticed this problem and have tackled it. This suggests that there is hope and entrepreneurs will not be left without help. Good luck in business, and we will follow further developments and keep you updated.
Publication Date: 06.08.2020
