Starting a business on social benefits

Dreaming of starting your own business, but finding it difficult to start it up because you are on benefits? The Decree on Social Assistance to the Self-Employed (Besluit bijstandverlening zelfstandigen, Bbz) offers you a chance to start with a little help. Go to your municipality, let them know that you are interested, and make your dream come true.

What is Bbz?

With Bbz municipalities can offer people on welfare, or people with an unemployment benefit scheme that is ending, support towards self-employment. There are 3 ways municipalities can do this.

  1. Supplementary benefit
    A supplementary benefit for the costs of living for a period of no more than 3 years. This is an interest-free loan.
  2. Working capital
    A loan (maximum amount €45,670 in 2023) for investments in your business, such as equipment, inventory, or stock. You need to pay interest on this loan.
  3. Preparation period
    Most municipalities provide support for starting up your business. This can be through a 1-year preparation period (in Dutch). During this period you will receive coaching, retain your benefits, and you are freed from the obligation to seek work. Municipalities will often outsource the coaching to a specialised agency. Municipalities will cover the coaching costs for the first year after the start of your business. An example of support you might receive is learning how to write a business plan. The type of support you receive may vary between municipalities. Some municipalities do not have the option of the preparation period or do not provide coaching.

How to apply for Bbz in the municipality where you live

First you write a business plan. This plan will show whether or not your business has a good chance of succeeding. Next, you present your business plan to a bank. If the bank rejects your business plan and, thereby, your application for a loan, you can apply for Bbz. You do this at the municipality where you live.

The municipality will set the following requirements:

  • You are between 18 and 65 years of age
  • You spend at least 1225 hours per year on your business. That is about 25 hours per week
  • You earn enough money with your business to support yourself in the future.

How does it work in practice?

If you want to start up your own business while on benefits, you need to contact the municipality where you live. There is often a special department that manages the Bbz scheme. The support offered may differ per municipality. Usually, municipalities have various programmes for you to participate in. Sometimes they offer workshops and webinars and support from an advisor. The municipality of Rotterdam offers the Regional Desk for Self-employed (Regionaal Bureau Zelfstandigen, RBZ). They help starting entrepreneurs with setting up a business plan. According to Thomas Koorndijk, RBZ advisor, 60% of starting entrepreneurs that use Bbz are successful.

Bbz for established entrepreneurs

You can also apply for Bbz if you started your own business and are experiencing temporary problems. There is also a scheme for entrepreneurs born before 1960 and a scheme for entrepreneurs who want to end their business. Read more about Bbz.

Also see the checklist how to start a business in the Netherlands.