Together with financing partners such as the Federal Association of German Volksbanks and Raiffeisenbanks, KfW is joining forces to provide promotional loans to businesses on behalf of the federal government. Existing liquidity assistance programs have been expanded to make it easier for entrepreneurs to access affordable loans.
The KfW Business Loan for Established Companies
This loan is intended for businesses that have been in operation for more than five years. It includes risk assumption (liability exemption) for financing partners (mostly the companies’ primary banks) of up to 80 percent for working capital loans with a credit volume of up to 200 million euros. The fact that KfW assumes the risk for a large portion of the loan is intended to make lending more attractive to banks.
In addition, the liability waiver is also granted to large companies with annual revenue of up to 2 billion euros. Previously, the revenue threshold was 500 million euros per year
ERP Universal Startup Loan for Young Companies
This loan type is available to newer companies that have been in business for less than five years. Here, too, KfW assumes 80 percent of the risk for the participating bank for working capital loans of up to 200 million euros.
KfW Growth Loan for Larger Companies
This loan, previously limited to innovation and digitalization, is being temporarily expanded to cover general corporate financing, including working capital, through syndicated financing (where multiple banks jointly extend a loan). Here, too, the revenue threshold for eligible companies is being raised (from 2 billion to 5 billion), and the proportion of risk assumed is being increased to up to 70 percent.
KfW Special Programs
In addition, KfW is introducing a new KfW special program with increased risk tolerance for small and medium-sized enterprises as well as large companies.
The special programs are also intended to be available to companies that have temporarily encountered financing difficulties due to the crisis (“crisis-appropriate increase in risk tolerance”).
Since the situation is changing almost daily, requiring us to continually reassess potential measures, we will continue to provide you with up-to-date advice and support to help you navigate this exceptional situation—at least from a business perspective.
