How is the horticultural sector doing in terms of funding? How did this occur and what does the future look like? These are questions central to the meeting at a Dutch information day for young people seeking to enter the industry today.
Scepticism seems to abound in the sector, as many young entrepreneurs expressed their doubts in relation to investments and banks. Peter Engelen, Counsellor at Flynth, conceded that financial backing by banks isn’t as forthcoming as it used to be. "But in the industry,” he added, “there are few solid initiatives. Companies on the decline are inclined to put their affairs in order before they think of new investments.”
Peter Engelen, advisor with Flynth
René de Vreede of Rabobank Oostland also admitted the market is a slow one. "That requires a different approach to the market. Previously a bank considered what was required for a company and whether that fit within the budget. Now the assessment is based on the costs and revenues involved, coming the borrowing capacity. With equity of 25-30% and a return of 5%, we often see no problem." He stressed that a strong plan ("a median price with a story") is also a requirement.
Peter de Vreede talked about alternative funding
Engelen expects a 25-30% equity to remain a requirement in the horticultural industry. "The role of banks remains high because there is no other way to get cheap money," said the consultant. But on the other hand, Engelen sees other options, additional lenders: investment companies, private investors, crowd funding or NEOS business finance: funding from pension funds and insurers. Guarantees given by the government, as already happens in geothermal drilling, and financing (research) projects together are also possibilities.