KMU-Fonds Gründung & Wachstum
Financing for small and medium-sized enterprises (SMEs)
Are you a freelance professional, founder or a small or medium-sized commercial enterprise (SME) based or running an operating facility in Berlin? Would you like to relocate, take over or invest in the future of your business? Use SME funding available under the European Fund for Regional Development (EFRD) to co-finance your investment project!
'KMU-Fonds Gründung & Wachstum' at a glance
-
Loans of up to EUR 10 million to finance company takeovers and growth and to pre-finance contracts in co-operation with the applicant's own bank
-
Loans of up to EUR 250,000 to finance start-up and growth also as direct loans
-
Variable loan terms with an initial grace period
'KMU-Fonds Gründung & Wachstum' in detail
Who is eligible for support?
- Small and medium-sized enterprises (SMEs) in the commercial industries (as currently defined by the EU)
- Freelance companies
- Founders
with an operating facility in Berlin.
What is supported?
Under the ’KMU-Fonds’, investment and the related operating equipment can be co-financed within the scope of the following measures:
- Start-up and consolidation projects
- Company takeovers, however, not between first-degree family members
- Relocations
- Investments, such as property, machines/equipment and material warehouses, also in the case of reorganisation, such as rationalisation, relocation or expansion.
- Pre-financing of specific contracts (including the related operating equipment) for existing companies
- Operating equipment within the scope a company expansion
The project to be financed must be carried out at a Berlin-based operating facility.
What is not eligible for support?
- Re-financing and follow-up financing of projects that have already begun or have been completed
- Investments in companies in difficulty
- Investments in companies operating in the following sectors: agriculture, fisheries, aquaculture, coal, mining, nuclear power and tobacco
What kind of support is available?
With co-financing under the ERDF, the ’KMU-Fonds’ offers the following:
- Growth loan of up to EUR 10 million together with a commercial bank or another private co-financer (granted within the scope of 'Berlin Kredit' according to the borrower's bank principle).
- Start-up and growth loan of up to EUR 250,000, also as a direct loan (can also be financed beyond this amount via 'Berlin Start' ).
Terms and conditions
- The loans have a maximum term of 20 years, grace periods (years) can be agreed to.
- Financing for up to 100%.
- Interest is payable at market rates.
- The terms and conditions of syndicated loans are agreed to with the applicant's bank.
- Commitment interest is agreed to at the customary rate, beginning three months after the date of approval, for loan amounts not yet paid out.
How to apply
As a rule, applications must be submitted prior to commencing the project (for example, first binding order, conclusion of a purchase agreement, commencement of the innovation project etc.).
Financing without the involvement of the applicant's bank (loans of up to EUR 250,000)
- In order to apply, submit the completed application form along with the supporting documents (see checklist (german only) ). You can apply online using the application process provided on IBB’s customer portal. Alternatively, you can download your completed application form and send this by post or submit it in person.
- Once your application is received, you will be sent confirmation of receipt. As soon as all the documents are complete, they will be examined.
Financing with the involvement of the applicant's bank (syndicated loans)
- You should submit your (informal) application to your own bank with reference to Investitionsbank Berlin's ’KMU-Fonds’.
- You should then contact your bank regarding any other documents and information that may be needed. These should generally be the same documents and information referred to in the application form for direct loans.
- If your bank is willing to approve the loan, it will apply to us for co-financing under the ’KMU-Fonds’.
- If we too approve your application, you will receive a loan agreement from your bank.
Financing according to the borrower's bank principle ('Berlin Kredit')
- You submit your loan application directly to your own bank with reference to IBB's 'Berlin Kredit' programme. Your application should include the required documents. Please use our checklist (german only) and the application form (german only) for your application.
- The decision as to whether the loan is to be granted is made by your bank on the basis of their credit assessment and collateral check. If this check is positive, the bank approves the loan on the application form and passes the documents on to IBB.
- IBB will check whether all the preconditions for support are fulfilled. If the result is positive, IBB can approve the loan within a few working days.
- If you apply for a guarantee in your application, BBB Bürgschaftsbank zu Berlin-Brandenburg GmbH will also examine your loan documents at the same time as IBB.
Please contact us at the earliest possible date. Our Customer Centre will be pleased to answer detailed questions regarding the programme and assist you with your application.
Please note: Applications are accepted in German only.
Other important details
What are the most important prerequisites for granting loans under the 'KMU-Fonds' programme?
The most important precondition for granting loans is the submission of a tenable business concept showing how such concept can achieve the sustainable establishment or improvement of your company's competitiveness and how the loan and interest will be repaid. You will also be required to submit a proposal for collateral for loans in excess of EUR 25,000. A key criterion for granting loans continues to be the guarantee of sufficient business expertise. This can also be secured through external coaching.
What collateral must be provided?
Loans in excess of EUR 25,000 must be secured with customary collateral. In the case of companies with limited liability, the shareholders/managing directors of the borrower company who, due to their position as shareholders have a major influence on the company, must also issue an absolute guarantee. In the case of limited partnerships, this is also required by the limited partners who have a major influence on the company. In the case of 'Berlin Kredit' and syndicated loans, the borrower and the borrower's bank agree on the collateral type and amount. In cases like these, collateral is managed by the borrower's bank, otherwise by us.
What needs to be considered if negative indicators exist regarding the founder, shareholder or company?
Financing will be rejected if negative indicators are found regarding the founder/shareholder or company (negative Schufa entries not removed, tax debts payable, judicial dunning proceedings, declaration of assets and liabilities under oath due to payment arrears, ongoing company or private insolvency proceedings).
How are loans repaid?
- Repayment is effected in equal quarterly instalments after the initial grace years have expired.
- During the grace period, only the interest on the loan amount is repaid.
- Loans due to be repaid at the end of the term are repaid in one amount at the end of the term.
- Early repayment of all or part of the outstanding loan amount is usually possible during the first 10-year fixed-interest period, however, a prepayment penalty will be charged.
- In the case of syndicated loans, the final details of repayment are agreed to via the borrower's bank.
Special features with real-estate financing
Investments in real estate for the sole purpose of letting to third parties only qualify for support if the tenant/leaseholder or, in the case of subletting, the end tenant meets the application criteria. This means that financing for real estate investments is only possible when the lessee also meets the application criteria. If commercial property is purchased for immediate letting, it should be generally noted that the property purchased must be thoroughly redeveloped, refurbished or converted.
Can participations in companies be financed?
Support is available to natural persons and legal entities acquiring a stake in a company, in as far as such transfer takes place between independent business partners. In the event that a natural person acquires a stake in a company, such participation must total at least 10%.
Is financing available for operating equipment?
Financing is available for operating equipment, for instance, to finance raw materials, goods, stocks and other parts of current assets. One precondition, however, is that financing must be related to the new establishment or expansion of the company or its growth. Expansion can be assumed if
- financing for operating equipment is related to investments.
- existing orders are to be pre-financed which will help to expand sales.
- an additional business purpose is to be pursued or if financing will help to access a new field of business or markets, new projects or new developments.
Traditional forms of financing for operating equipment, for instance, an overdraft facility or framework loan, for existing companies are ruled out.
What happens if I am in arrears with my payments or have to file for bankruptcy?
If you are in arrears with your payments, this will lead to interest on arrears in accordance with the contract, possibly also to termination with a prepayment penalty and possibly to recourse to collateral.
Insolvency will lead to termination with a prepayment penalty and, if necessary, liquidation of collateral. In the case of syndicated loans, the default conditions are laid down in the contract as agreed with the borrower’s bank.
What should be borne in mind in the event of a change in the way funds are used?
After completion of the project, proof of the contractual use of the loan must be furnished within 6 months on a separate form. Deviations of more than 20% per item from the contractually agreed project planning must be agreed in advance with us. In the event that proof of proper use of the loan cannot be furnished, we will be entitled to recover the loan in part or in full.
Do you wish to combine support programmes?
It is possible to combine a loan from the 'KMU-Fonds' with support measures from IBB, the federal government, the federal state and the European Union - for instance, with funds from the 'GRW' programme.
A guarantee for the borrower's bank share, or as part of 'Berlin Kredit' for the entire loan sum, issued by BBB Bürgschaftsbank zu Berlin-Brandenburg GmbH can also be applied for in an integrated application procedure.
Financing partner
BBB Bürgschaftsbank zu Berlin-Brandenburg can provide guarantees if sufficient bank guarantees cannot be provided.