KfW and German Guarantee Banks Launch New Funding Offer for Start-ups and Successors
KfW, German guarantee banks, the Federal Ministry for Economic Affairs (BMWK) and the Federal Ministry of Finance (BMF) are launching a new ERP Promotional Loan for Start-ups and Successors on November 1, 2024. The program provides low-interest loans and full risk relief for banks.
Berlin – A new financial support program, the ERP Promotional Loan for Start-ups and Successors, is set to launch in Germany on November 1, 2024, aiming to facilitate business creation and company transfers. The initiative is a joint effort by KfW Group, German guarantee banks, the Federal Ministry for Economic Affairs and Climate Action (BMWK), and the Federal Ministry of Finance (BMF).
The program offers founders and successors access to low-interest loans refinanced from the ERP Special Fund. A key feature is the complete relief of credit default risk for regular banks, with the Federal Government and guarantee banks providing guarantees covering 80% and 100% of the risk, respectively. This structure aims to incentivize banks to finance new ventures and company takeovers.
"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," stated Katharina Herrmann, Member of the Executive Board of KfW. She emphasized that the program facilitates funding access, laying the groundwork for start-ups and successful company transfers.
The ERP Promotional Loan supports investments, company acquisitions, and resource financing, with loan amounts up to EUR 500,000. Applicants are not required to provide collateral, and the loan benefits from highly favorable interest rates. The application process is designed to be straightforward, with applicants first approaching their regular bank, which then coordinates with the guarantee banks and KfW for approval and refinancing.