Can you start a business with debts?

Do you want to start a business, but are you worried about existing debts? Not all debts will mean you have to postpone your plans. Do you have problematic debts? Learn about financial support from your municipality, loans from a credit bank, and how a debt counsellor can help you.

Assess your debts and consider the options

The majority of people in the Netherlands have some type of debt. Common examples are student loans or a mortgage. But even an instalment contract for a mobile phone or a private car lease are types of debt. All debts are recorded by the National Credit Register (‘Bureau Krediet Registratie’, BKR) and can be seen in your BKR credit report.

Debts are not a problem when you can afford the repayments. Research by Statistics Netherlands (in Dutch), however, shows that around 650,000 Dutch households have problematic debts. That means they find it difficult to pay off their debts and their situation can quickly worsen due to high interest rates. Starting a business with problematic debts is difficult.

There are usually costs and investments when you start a new business. If you have debts, regular banks may be reluctant to lend you money due to the extra risk. In many cases, taking care of your debts will be the first step in your entrepreneurial journey.

These are the most common options for starting a business if you are in debt:

  • Ask for help from your municipality
  • Find help on your own
  • Apply for funding

1. Ask for help from the municipality

If you have no income and no savings to fund a new business, contact your local municipality about help and financial support. This is regulated under the Decree on Social Assistance to the Self-Employed (‘Besluit bijstandverlening zelfstandigen’, Bbz).

“Problematic debts do stand in the way,” explains Hans Heyer, an advisor to self-employed professionals at the municipality of Groningen. Unless you get permission from the supervisory judge, starting a business is not allowed if you are in the middle of debt restructuring (‘Wet schuldsanering natuurlijke personen’, Wsnp).

“If you are in the final months of debt restructuring, we may want to start preparations for the Bbz application. The basic principle, however, is that you need to solve your problematic debts before you can make use of the Bbz.”

Debt assistance from your municipality

When you ask for help from your municipality, you will be assigned a counsellor who will try to make agreements with your creditors. This is called an amicable settlement. If you cannot reach a payment agreement, the municipality may decide to pay off your debts. A municipal credit bank (‘gemeentelijke kredietbank’) is a social institution that will grant you a so-called restructuring loan. This loan must be repaid within 3 years.

The advantage of a restructuring loan is that the payments reflect what you can afford to pay. The loan is often combined with income management. This means your income is paid directly into the credit bank’s account. The bank pays your fixed costs.

Are you debt-free? Apply for the Bbz

Starting entrepreneurs who have solved their debt – with or without a counsellor – can take part in their municipality’s preparation programme. During this trajectory, you continue to receive your benefits and your obligation to apply for a job lapses. You can read more about how the Bbz scheme works.

2. Find help on your own

Contact a debt counsellor if you need help to solve your debt problems. The advantage is that you can usually get in touch right away. You can also choose which counsellor you want to work with. Together with the debt counsellor, you will make an overview of all debts. Which ones can you pay off or not? And within how much time? Perhaps debt restructuring is an option. This means agreeing payment schedules with creditors, such as the Tax Administration. If creditors do not want to cooperate in such an arrangement without good reason, the court can force them to do so. This is called a compulsory settlement. 

Apart from resolving debts, a debt relief worker can also guide you in starting your business.  And he or she can make a plan with you on how best to handle your finances

Do you need help? A list of debt relief counsellors can be found on the NVVK website (in Dutch). This is the industry association for debt assistance and social banking.

3. Apply for funding

Getting a loan for your business plans usually fails at a regular bank if you are in debt. However, there are other ways to get money. Consider crowdfunding, for example. This involves asking a large group of people, usually via the internet, to make small contributions to collect the required money together.  Borrowing money from friends or family is also an option.


Qredits is a non-profit foundation. It works with various banks and the Ministry of Social Affairs and Employment. “Our job is to give people a second chance,” explains Spit. That does not mean you can simply approach Qredits to ask for financing for your business. “Our advisors assess all applications. We did a lot of video calling during the corona crisis, but for risky applications, we always visit the business premises in person.”

Have you ever been declared bankrupt? Then the advisor will pay close attention to the bankruptcy report. “Are there signs of serious negligence or fraud? Were you to blame for anything? We want to see how you handled the bankruptcy. And what you will do to prevent it from happening again. In some situations the business owner could not do anything about it. We look at such an application and see if it is possible to grant a loan.”

Have you used the Natural Persons Debt Rescheduling Act (Wsnp)? If you get a loan from Qredits, you will receive mandatory guidance from a coach.

Borrowing from a credit bank

If you need a loan to start your business, you can also go to a credit bank that is affiliated with Social Banks Netherlands (select the language in the top-right menu). These banks are social organisations that work with municipalities. Their focus is on helping people with financial problems. They look closely at your situation to decide if you can receive a loan.