It should be unbureaucratic, quick and transparent, says KfW spokesman Wolfram Schweickhardt. Faster than the previous ten to 14 days until a loan from the KfW state promotional bank reaches the respective company via the house bank, Volksbank or Sparkasse . “We make every effort to accelerate this and are in close contact with all credit institutions.”
KfW cannot grant the loans directly, it always runs through the financial institutions. In consultation with the Federal Government, she made the conditions for her three support programs, which are already running, especially for small and medium-sized companies, the self-employed and freelancers, considerably easier.
KfW assumes 80 percent of the credit risk, for which it receives guarantees from the Federal Government's Corona package with a volume of more than half a trillion euros . The banks remain with 20 percent of the credit risk. Interest rate reductions are not planned, however – so far. Depending on the creditworthiness of the borrower and the term, the interest fluctuates between one and more than seven percent.
Two other corona programs
KfW itself works according to the information from Schweickhardt with high pressure on two other corona programs, on the one hand for small and medium-sized companies, and on the other hand for large companies. It is not yet certain when they will be activated.
After the financial crisis 2008, the development bank, in consultation with the federal government, launched a similar crisis program. 13, 5 billion euros were paid out at the time. Around 1.2 million jobs have been secured as a result, according to KfW. No one knows at KfW whether the corona crisis will again cost more than 13 or even more. The programs are not capped, there is no upper limit.
The KfW entrepreneur loan is aimed at companies that have been active for at least five years and have an annual turnover of up to two billion euros. It is intended for investments, but also for the financing of operating resources of up to 200 million euros, i.e. of current expenses such as salaries and wages or rents. KfW also pays here 80 percent of risk. “We explicitly look at self-employed and freelancers with annual sales of, for example 60. 000 Euro, “says Schweickhardt.
ERP for young companies
The KfW growth loan program is actually intended to finance innovations and digitization measures. Because of the crisis, the development bank is now opening it to finance current expenses for companies with annual sales of up to five billion euros. It is also intended for companies that are at least five years old. However, only 70 percent of the risk is borne by KfW. Schweickhardt cannot say why there is this gradation.
Finally, the ERP (European Recovery Program) start-up loan is aimed at young companies that have been active for less than five years. Here, too, ongoing operating expenses can be financed with loans of up to 200 million euros – at 80 risk assumption the development bank. The loans for all programs can have terms of between five and 20 years with repayment-free periods of one to three years.
No pure grants planned
Applications are sent electronically from the respective bank to KfW, where they are checked again. KfW, emphasizes Schweickhardt, endeavors to speed up the processes in view of the current urgency and to make them as transparent as possible.
According to KfW, pure grants are currently not planned. It is also unclear whether the government will ultimately waive not only interest but also repayment for companies that are particularly affected.
After the crisis 2008 KfW received around 6700 loan applications with a volume of 24 billion euros for the special program at that time with banks and savings banks. More than 4800 applications with a volume of 13, 5 billion euros were approved, rejected 15 percent of requests. Back then, more than 4500 loans with a total volume of 4.6 billion euros went to small and medium-sized companies with a turnover of up to 500 Million Euros.
Larger 300 companies accounted for loans totaling 8.9 billion euros. Back then, the special program had a double positive effect, says Schweickhardt. “On the one hand through direct financial support, especially in the middle class. On the other hand, the entire banking industry was sent a signal that the credit supply is guaranteed. ”