Government measures in key jurisdictions 3rd edition final - Flipbook - Page 54
Bodo Dehne | b.dehne@heuking.de | +49 211 600 55 268
Michael Pauli | m.pauli@heuking.de | +49 221 20 52 421
Loans and
financial
support
•
–The “
” – this scheme provides funding to medium-sized enterprises
with more than 10 employees if the enterprise showed profits in 2019 or on average over the
last three years. The credit volume per company is up to 3 monthly turnovers, with max. EUR
800,000 for companies with more than 50 employees, and max. EUR 500,000 for companies
with up to 50 employees.
–The “
” – this scheme is designed for medium-sized
enterprises and large companies. It aims at mobilizing the willingness of companies’
principal banks to grant substantial amounts of loans to strengthen liquidity. Under this
scheme, the German state-owned development bank KfW assumes up to 80% of the risk,
but no more than 50% of the total debt. The KfW risk share amounts to at least EUR 25
million and is limited to 25% of the annual turnover in 2019 or double the wage costs in
2019 or the current financing requirements for the next 12 months.
–The “
” – this scheme aims at companies that have been on the
market for more than five years. The scheme shall increase their chances of being granted a
loan commitment. If they apply for a loan for investments and working capital, the German
state-owned development bank KfW assumes up to 80% of the bank’s risk for large
companies and up to 90% of the bank’s risk for SMEs. Companies can apply for up to EUR 1
billion per company group. A similar
program exists for companies that have been on the market for less than fiveyears.
Has the
government put in
place any new
bank funding
schemes?
54
Lending is available under a number of new schemes that have been introduced in Germany.
These range from schemes for large corporations to schemes for SMEs, start-ups, microenterprises and self-employed individuals. Some of the most relevant schemes are:
•
State-owned banks also offer to guarantee loans provided to companies by their principal
banks if the company has not been in financial difficulties. Guarantees may cover max. 90% of
the loan risk, i.e., the companies’ respective principal bank must assume at least 10% of
exposure.
•
In addition to the programs of the federal government, each federal state has put in place
accompanying programs to support regional businesses.
•
Liquidity support through “unlimited” loan guarantees
•
To stabilise the real economy in times of the Covid-19 pandemic, the German parliament has
established an Economic Stabilisation Fund (“WSF”) as a special fund. The WSF shall overcome
liquidity bottlenecks and strengthen the equity base of companies. Instruments of the WSF are
(i) guarantees for debt instruments in the amount of EUR 400 billion to bridge liquidity
bottlenecks and support the refinancing of companies, (ii) EUR 100 billion to strengthen capital
through equity investments in companies (recapitalisation measures) and (iii) EUR 100 billion to
refinance KfW special programmes. Stabilisation measures under the WSF are possible until
the end of 2021 and shall be the last resort.
•
Establishing an economic stabilization fund for the real economy
Government measures in key jurisdictions