Receiving Funds for Your Business in Germany

Obtaining a business loan in Germany

Local and foreign investors wanting to start a business in Germany and do not have the necessary amount have several options of obtaining corporate loans. They can choose to apply for a loan with a German bank or to receive funding from publicly subsidized loan programs. Public loans are usually preferred because of the lower interest rates and the attractive grace periods. There are several banks in Germany providing this type of funding to companies. Another advantage is that foreign investor benefit from the same conditions as German investors.

For details about public corporate financing programs you can refer to our German lawyers.

German loan schemes from the European Investment Bank

The loans granted by the European Investment Bank are very popular among companies in Germany, and also at European level. The European Investment Bank finances companies in cooperation with private banks in Germany. The main advantages of receiving funding from the European Investment Bank are the long-term repayment timeframes and the broad applicability. German companies operating in the following industries can apply for loans with the European Investment Bank:

• -          economy,
• -          technology,
• -          environment,
• -          finance.

The loans are destined to both public and private companies in Germany and the amount can cover up 50% of the investment project. Small and medium sized companies can apply for these types of loans if their project costs below 25 million euros.

Obtaining public funding for a German company

The KfW (Kreditanstalt für Wiederaufbau )Bankengruppe, also known as the Reconstruction Credit Institute, in Germany’s development bank dedicated to companies. The KfW Bankengruppe provides several financing options to German companies among which promotional loans and private equity. The most notable funding program in the Entrepreneur Loan. Under this program, both German sole traders and companies operating for less than five years can benefit from funding up to 25 million euros with a repayment period of up to 20 years. The Entrepreneur Loan program also comes with a fixed interest rate for loans contracted for 10 years at most.

For details about the most advantageous business loans and their eligibility criteria, please contact our law firm in Germany.