LOAN FOR BUSINESS IN GERMANY

What types of financial support are available in Germany?

Grants

Grants are non-refundable financial contributions. Government grants are non-repayable financial contributions in the form of grants, known as “direct” grants. The grant recipient does not have to return the amount and is not required to do anything instead. Grants are provided for investment and innovation projects and assigned to them. Full funding through a grant is not possible. A grant can cover up to 50% of the funding requirement.

Grants are provided in the following areas:

• Creation and expansion of business;
• Research and development;
• International projects;
• Creation of jobs;
• Learning activities;
• Environmental measures;
• Business consultations.

Credits (loans)

Lending is a form of debt financing and is of particular interest to small and medium-sized companies. SMEs often have up to 90% of loan funds. The loans are provided by state-owned development banks and are designed to help German SMEs and thus support the German and European economy.

The most common and popular type of loan is a business loan. These are medium or long-term loans for investment projects, financing of operating resources or starting a business. Due to low interest rates, they are especially attractive. Other advantages of business lending are interest-free periods.

Investments of medium investment companies (Mittelständischen Beteiligungsgesellschaften)

Medium-sized investment companies (MBG’en) support small and medium-sized companies with their own capital. As an institution for regional economic development, they were founded in the early 1970s. Their shareholders are chambers and trade associations from all sectors, credit institutions and insurers and, in some cases, development institutions of the respective federal states. Like financial institutions, MBGs are privately organized and based on economic conditions. The amount of investment should not exceed the existing equity capital of the company. The term is usually no more than 10 years, and the agreed interest (no more than 12%) is paid annually.

Guarantees

Guarantees are an addition to financing, and not an independent type of financing. They are suitable for borrowers who cannot provide sufficient collateral to use forms of financing such as loans. The best-known and most common form of such replacement collateral is the default guarantee. As a rule, the guarantor bank requires a fixed commission (even if the guarantee is rejected or the application is withdrawn) and a small percentage of the loan amount. Annual commissions at low interest rates are also possible.

Guarantees are available for investments, business acquisitions, rationalization and modernization activities, and business start-ups.

Assistance in obtaining a loan for:

• purchase of real estate (house, apartment, other buildings) in the secondary market;
• purchase of land for construction;
• purchase of equipment for business;
• other investment projects.

In order to obtain financing or a loan in Germany, it is very important to have a reliable partner who can select funds, prepare applications for financing, justify estimates, help develop viable business models, etc.

Our services are priced from 200 euros per consultation and subsequent support.