Joint press release by KfW, German guarantee banks, BMWK and BMF

• KfW provides low-interest loans from the ERP Special Fund
• Full relief for regular banks from credit default risk by the Federal Government and guarantee banks
• Attractive conditions for start-ups and company transfers

From 1 November 2024, an attractive new promotional offer will be available to company founders and successors. In a novel form of cooperation, KfW, the German guarantee banks, the Federal Ministry for Economic Affairs and Climate Action and the Federal Ministry of Finance are launching the ERP Promotional Loan for Start-ups and Successors. Today, KfW and the German guarantee banks have signed a cooperation agreement for the new promotional offer.

The new promotional offer provides a key impetus in start-up and successor financing. The offer makes it easier for founders and company successors to access financing and offers maximum security for the participating regular banks. What makes these funds particularly special is that the regular banks will be fully relieved of the credit default risk by a 100% guarantee from the respective guarantee bank. The Federal Ministry of Finance and the Federal Ministry for Economic Affairs and Climate Action will grant an 80% back-to-back guarantee from the Federal Government. KfW will refinance the regular banks. To this end, KfW will make available the loan amounts at reduced interest rates from funds in the European Recovery Program (ERP) Special Fund. As a result, regular banks will not have to use their own sources of refinancing, while their customers will benefit from attractive conditions.

Katharina Herrmann, Member of the Executive Board of KfW responsible for domestic promotional business:

"Entrepreneurs are the foundation of our country’s economic growth. The wealth of ideas and courage of founders are key drivers of economic growth and competitiveness. Successors play a key role in the stability of SMEs. As a promotional bank, our task is to strengthen the entrepreneurial spirit and future viability of the German business landscape. This is exactly where the new promotional programme comes in. It will facilitate access to funding, thereby laying the foundations for start-ups and successful company transfers."

Manfred Thivessen, Member of the Management Board of the Association of German guarantee banks (VDB) and Member of the Management Board of Bürgschaftsbank NRW:

"This close cooperation between the guarantee banks and KfW will further strengthen the promotion of the SME economy in Germany. Through our new product, the strong, comprehensive expertise of our funding advisors and the valuable network of chambers and associations, we want to make it easier to found a company and secure successions. The principle is extremely simple: borrowers go to their regular bank as usual, and the cooperation partners take care of everything else."

Dr Robert Habeck, Federal Minister for Economic Affairs and Climate Action:

"I'm delighted we've created a programme for start-ups and successors with the new ERP promotional loan, which offers attractive financing opportunities at favourable conditions. The Federal Ministry for Economic Affairs and Climate Action is particularly committed to new and successor companies. They are the key to innovation, strong SMEs and secure jobs and training. The close cooperation between the Federal Government, KfW and guarantee banks shows that together we can achieve the best results for founders and successors – in a manner that is needs-based, unbureaucratic and practical."

Dr Florian Toncar, Parliamentary State Secretary at the Federal Ministry of Finance:

"With the ERP programme for promotional loans for start-ups and successors, the Federal Government is creating further attractive funding opportunities for business founders and successors, and it can mobilise private capital through cooperation with KfW and guarantee banks. I very much welcome this development. KfW and the guarantee banks are a strong financing partner for German SMEs together with the Federal Government and the individual states. Through this programme, we want to pave the way for more start-ups and succession financing in Germany."

Key programme points

The ERP promotional loan for start-ups and successors promotes investments, company acquisitions and the financing of resources. Up to 35% of a project can be financed, with a maximum loan amount of EUR 500,000. Applicants are not required to provide collateral. Thanks to the funds from the ERP Special Fund and the assumption of the credit default risk by the guarantee banks and the Federal Government, they benefit from particularly low interest rates. It can also be combined with other promotional programmes and hedging instruments offered by the guarantee banks. Two term variants are available for the funding.

Simple application process and clear responsibilities

Applying for the ERP promotional loan is simple and transparent. The applicants first apply for the loan for the project from their regular bank. The regular bank submits the application for guarantee acceptance to the responsible guarantee bank via the central website kapital.ermoeglicher.de (in German). After taking over the guarantee, the regular bank applies for the refinancing loan from KfW, which reviews and approves the application on a fully automatic basis.

More information and the possibility to apply can be found at kfw.de/077 (in German) or kapital.ermoeglicher.de (in German)