2.1 Authorisation to Provide Financing to a Company
Specify the requirements and procedures for banks and non-banks to be authorised to provide financing to a company organised in your jurisdiction.
In Belgium, providing financing to a company (excluding consumer credit and mortgage credit to individuals for residential purposes) (« commercial lending ») on a stand-alone basis does not require a license nor any filing and/or registration.
Specific rules of conduct apply however where lending to SMEs pursuant to the Act of 21 December 2013 on the Financing of SMEs. These rules of conduct include a duty of rigor, a duty of information, restrictions on a number of contractual terms, and a right of prepayment for the enterprise. SMEs are individuals or legal entities pursuing an economic purpose in a sustainable manner or liberal professions (e.g. lawyers, notaries, etc.) that have no more than one of the following criteria in their last and penultimate closed financial year: (i) 50 employees on an annual basis; (ii) annual turnover of €9 million; and (iii) total balance sheet of €4.5 million.
Sometime, commercial lending activity requires a license, i.e. if undertaken in combination with deposit taking (which requires a license as a credit institution) or if funded with crowdfunding (which may require a license as crowdfunding platform).
– credit institutions (banks)
Credit institutions are regulated by the Belgian Act of 25 April 2014 relating to the status and supervision of credit institutions and stockbroking firms.
Credit institutions are undertakings the business of which is deposit-taking activities and granting credits for its own account. Besides deposit-taking and lending, the majority of the activities listed under Annex I of Directive 2013/36 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms may only be carried out by licensed entities and/or are subject to specific regulations.
Before starting their business activities, Belgian and foreign credit institutions must submit an application for an authorisation (the banking licence) to the competent supervising authority (in Belgium the National Bank of Belgium). This authorisation is granted if a wide range of operational conditions and requirements are complied with. In accordance with the principle of single authorisation, an EU credit institution may passport the services, or perform the activities, for which it has been authorised, throughout the EU, either through the establishment of a branch or the free provision of services.
– crowdfunding platforms.
The Act of 18 December 2016 on crowdfunding platforms (entered into force on 1 February 2017) creates a legal framework for crowdfunding and alternative types of funding. This law is applicable to both lending-based and equity-based crowdfunding platforms.
The act only regulates financing by the crowd of a business or a professional project. It is not applicable to platforms that only offer or provide alternative funding services to the following investors or lenders: legal entities, (MiFID) professional investors or fewer than 150 persons.
Crowdfunding platforms offering these types of alternative funding services must be authorised by the Financial Services and Markets Authority and are subject to rules of conduct. However, regulated entities (credit institutions and investment firms) do not need an additional licence to provide alternative funding services, but they must notify the FSMA and comply with the same rules of conduct as the platforms.