What is equity-free funding?

Equity-free funding is money that does not cost you shares in your company. In the Netherlands it usually means a tax credit, a lower tax rate, or a loan from a public body. The provider does not become an owner and has no say in how the company is run.

Equity-free funding is money a company can use without giving away shares. It arrives as a tax reduction, a payment or a loan, and the body that provides it does not become an owner of the company.

The phrase turns up on almost every European funding page, and it is a plain description rather than a technical term. It marks the line between money that changes your cap table and money that does not.

Where it comes from in the Netherlands

Most of it is tax. WBSO lowers the payroll tax a company pays for its research staff, and the innovation box lowers the rate on profit that came out of that research. Both reward work the company is already doing and paying for, which is why they are usually the first equity-free money a landing company reaches. The map of what exists is in which government grants a startup can get, and the largest of the tax schemes is explained in what WBSO is worth in 2026.

The rest is lending and European programmes. The Dutch Innovation Credit is a loan. The European Innovation Council pays a grant alongside an investment, so only part of that route is equity-free.

What it still costs you

Time and record keeping, mostly. Every scheme has conditions, deadlines and an audit at the end, and a company that misses the records can be asked to give the benefit back. A loan also has to be repaid, which makes it equity-free without being cost-free. The useful contrast is not free against expensive, but ownership against obligation: an investor buys a share of the future, while a public body sets conditions on the present.

Sources

1. Business.gov.nl, Getting financing for your innovation, checked 22 September 2026
2. Business.gov.nl, Innovation Credit Scheme, checked 22 September 2026

Checked on 22 September 2026. This page is general information, not legal, tax or investment advice. Rules change: check the official source, or ask an adviser, before you act on it.