The new KfW Special Programme 2020 will be launched today. The programme is available to small and medium-sized enterprises as well as large enterprises, with no cap being put on the funds to be provided for it. The conditions for taking out loans have been improved even further. KfW will apply lower interest rates and a simplified risk assessment procedure for loans of up to €3 million, which will bring additional relief to the economy. Furthermore, KfW will grant a higher rate of exemption from liability of up to 90 per cent for working capital and investments by small and medium-sized enterprises in order to make it easier for banks and savings banks to grant loans. The improved conditions are based upon the European Commission’s Temporary Framework on state aid law, which came into force on 19 March 2020.
said: “It is now important to help companies quickly and without red tape. An important element here is to provide access to liquidity. The improved financing conditions set out in the KfW Special Programme 2020 will help to significantly support the economy in this respect. Applications will be processed quickly and without undue bureaucracy. Payments will be made as quickly as possible because we know that, for many enterprises, every week counts.
Federal Minister of Finance Olaf Scholz said: “We are launching an unprecedented support programme to protect our country, our employees and our companies. Together with the KfW, we are ensuring that our companies remain solvent during this crisis. To this end, we are also deploying the great financial strength of our state. The Federal Government will provide the KfW with the necessary amount of guarantees for this.
Dr Günther Bräunig, Chairman of the Board of Managing Directors at KfW, said: “The banks and KfW have prepared intensively for today. Never before have we been able to put a full programme together this quickly. The Federal Government will assume close to full liability and the loan margins are extremely low".
The KfW Special Programme 2020 will be implemented through the programmes ‘KfW Entrepreneur Loan’ (037/047) and ‘ERP Universal Start-up Loan’ (073/074/075/076), whose financing terms will be modified and significantly extended. In addition, the special programme ‘Direct Participation in Syndicated Lending’ (855) enables large syndicated loans to be granted, with KfW assuming part of the risks.
The programmes are available to enterprises that are temporarily faced with financing difficulties due to the coronavirus crisis. More specifically, this means that all companies that were not in financial difficulties on 31 December 2019 are eligible to apply for a loan. Funding will be provided for investments and working capital.
Applications can be submitted via the applicant’s main bank as of today. Payments will be made as soon as possible. Applications will be processed based on a simple and unbureaucratic procedure.