#KfWLoans

Special program for SMEs*,
Medium-sized business, large companies

Special program for SMEs*,
Medium-sized business, large companies

The protective umbrella for businesses and companies was adopted in order to support the economy with financial aid worth billions via the Kreditanstalt für Wiederaufbau (KfW). The extent of the financial aid depends on the type of company. Further, the application process should be simple and unbureaucratic.

Options of the Corona Shield

The German government has set up a protective umbrella for businesses and companies under which financial aid in the billions is to be provided to companies via existing as well as new programs of the Kreditanstalt für Wiederaufbau (KfW). These are divided into different aid programs with different conditions.

KfW Quick Loan

Requirements for the Quick Loan

  • The application for and granting of the credit is carried out via the house banks
  • The company must show a profit in the sum for the years 2017-2019 (or if the company has only been on the market for a shorter period, said period is used) or in 2019, employ more than 10 employees and have been active on the market before January 1, 2019
  • No distribution of profits or dividends during the credit period
  • Completion must take place by December 31, 2020 at the latest. Until this date, no further KfW loan can be applied for. It is excluded to switch from other KfW loans as well as to cumulate them with instruments of the Economic Stabilisation Fund (WSF) or with programs of the guarantee banks, which were expanded due to the Corona crisis
  • Excluded from special programs are companies that were already in economic difficulties as of December 31, 2019, rebuttable by
    • Ordered economic circumstances must be shown.
    • There must be no unregulated payment arrears > 30 days, no deferral agreements and no covenant breaches.

    The EU Commission for State Aid for Rescuing and Restructuring of Non-Financial Enterprises in Difficulty (Official Journal of the EU No. C 249/1 of 31.07.2014) specifies the criterion "company in economic difficulty".

    • Insolvency maturity exists or insolvency proceedings have already been initiated.
    • The equity base is:
equity 2019
share capital (or subscribed capital 2019)
< 50%
loss 2019
own resources 2019
< 50%
Debt ratio
external capital
equity
< 7,5
Interest coverage ratio
EBITDA
interest
< 1,0

The formulars should be applied for 2018/2019

Scope of the Quick Loan

Volume
  • up to 800 TEUR for operating resources and investments
    • max. 500 TEUR for companies with up to 50 employees
    • max. 800 TEUR for companies with more than 50 employees
    • up to a maximum of 25% of the annual turnover in 2019
Risk assumption
  • 100% of the credit default risk is assumed
other
  • Risk assessment neither by the house bank nor by KfW
    Note: Possible explanation of the management regarding the fulfilment of the criteria may be necessary
  • Interest rate 3%
  • Lifetime 10 years with 2 years of interest-only
  • Borrower is 100% liable for the repayment

PLUTA provides support for:

  1. Checking the requirements and negotiations with house banks
    • Accompanying restructuring measures and negotiations with stakeholders
  2. Submission of applications for financing with supporting documents:
    • Financial circumstances 2018-2019
    • (Integrated) corporate planning for 2020/2021
    • Scenario calculation (period and extent) of the COVID-19 effect
    • Assistance with any necessary documentation of the use of funds
  3. Precautionary development of alternative scenarios and accompanying insolvency law advice

Contact us now

ERP start-up loan

ERP start-up loan (<5 years) &
KFW entrepreneur loan (>5 years)

  • The application for and granting of the credit is carried out via the house banks
  • At the time of application, the project should be fully financed according to current planning until December 31, 2020, and a positive continuation prognosis should be given. All on the assumption that the overall economic situation will normalize again
  • Disbursements of dividends or profits (over the usual disbursements/withdrawals für business owners (sole proprietor)) are excluded
  • The combination of the ERP start-up loan and the KfW entrepreneur loan with other funding (loans, allowances and grants) is generally possible. However, a combination with the KfW Quick Loan 2020 or other KfW/ERP schemes with risk assumption are excluded
  • Excluded from special programs are companies that were already in economic difficulties as of December 31, 2019, rebuttable by
    • Ordered economic circumstances must be shown.
    • There must be no unregulated payment arrears > 30 days, no deferral agreements and no covenant breaches.

    The EU Commission for State Aid for Rescuing and Restructuring of Non-Financial Enterprises in Difficulty (Official Journal of the EU No. C 249/1 of 31.07.2014) specifies the criterion "company in economic difficulty".

    • Insolvency maturity exists or insolvency proceedings have already been initiated.
    • The equity base is:
equity 2019
share capital (or subscribed capital 2019)
< 50%
loss 2019
own resources 2019
< 50%
Debt ratio
external capital
equity
< 7,5
Interest coverage ratio
EBITDA
interest
< 1,0

The formulars should be applied for 2018/2019

Scope of the ERP start-up loan

Volume
  • Loans of up to EUR 100 million are possible for working capital as well as investments; in addition, an entrepreneurial loan is available for warehouses, investments/takeovers or leasing of
    • a maximum of 25% of the 2019 turnover, or
    • a maximum of twice the wage costs in 2019, or
    • in the amount of the current liquidity needs for 12 (SMEs) or 18 (large companies) months, or
    • in the amount of 50% of total debt or 30% of the total assets (with volume >EUR 25 million) after consolidation
Risk assumption
  • of 80% for large companies and 90% for SMEs* is possible; the risk of loan default is assumed,
  • also possible without risk assumption,
  • the rest is handled by the house bank (usually against collateral)
other
  • Simplified risk assessment by KfW; additional risk assessment by house banks for risk share
  • Interest rates between 1%-1.46% (SMEs*) and 2%-2.12
  • Commitment commission of 0,15% p.m.
  • Terms between 2 and 20 years depending on risk assumption and intended purpose as well as loan redemption plan.
  • Borrower is 100% liable for the repayment

PLUTA provides support for:

  1. Checking the requirements and negotiations with house banks
    • Identification of collateralization potential
    • Accompanying restructuring measures and negotiations with stakeholders
  2. Submission of applications for financing with supporting documents:
    • Financial circumstances 2018-2019
    • (Integrated) corporate planning for 2020/2021
    • Scenario calculation (period and extent) of the COVID-19 effect
    • Assistance with any necessary documentation of the use of funds
  3. Precautionary development of alternative scenarios and accompanying insolvency law advice

Contact us now

Direct participation for Consortium financing

Direct participation Consortium financing (>5 years)

  • The application for and granting of the credit is carried out via the house banks
  • At the time of application, the project should be fully financed according to current planning until December 31, 2020, and a positive continuation prognosis should be given. All on the assumption that the overall economic situation will normalize again
  • Profit and dividend disbursements are prohibited during the credit period
  • Excluded from special programs are companies that were already in economic difficulties as of December 31, 2019, rebuttable by
    • Ordered economic circumstances must be shown.
    • There must be no unregulated payment arrears > 30 days, no deferral agreements and no covenant breaches.

    The EU Commission for State Aid for Rescuing and Restructuring of Non-Financial Enterprises in Difficulty (Official Journal of the EU No. C 249/1 of 31.07.2014) specifies the criterion "company in economic difficulty".

    • Insolvency maturity exists or insolvency proceedings have already been initiated.
    • The equity base is:
equity 2019
share capital (or subscribed capital 2019)
< 50%
loss 2019
own resources 2019
< 50%
Debt ratio
external capital
equity
< 7,5
Interest coverage ratio
EBITDA
interest
< 1,0

The formulars should be applied for 2018/2019

Scope of the direct participation Consortium financing

Volume
  • Risk participation in debt capital financing > EUR 25 million for working capital and investments
    • max. 25% of the 2019 turnover or
    • max. twice the wage costs in 2019 or
    • current liquidity requirements for 12 months or
    • max. 50% of total debt or 30% of the total assets (incl. affiliated companies after consolidation)
    • The credit limit shall be determined by the greater of the above two limits
Risk assumption
  • 80% of the credit default risk is assumed
  • the rest is handled by the house bank (usually against collateral)
other
  • Duration up to 6 years pari passu of the financing partners at market conditions
  • Proof of the use of funds in accordance with the program required

PLUTA provides support for:

  1. Checking the requirements and negotiations with house banks
    • Identification of collateralization potential
    • Accompanying restructuring measures and negotiations with stakeholders
  2. Submission of applications for financing with supporting documents
    • Financial circumstances 2018-2019
    • (Integrated) corporate planning for 2020/2021
    • Scenario calculation (period and extent) of the COVID-19 effect
    • Assistance with any necessary documentation of the use of funds
  3. Precautionary development of alternative scenarios and accompanying insolvency law advice

Contact us now

Economic Stabilisation Fund

Economic Stabilisation Fund (WSF) for medium-sized / large companies

  • For companies in the real economy, i.e. companies which are not companies in the financial sector and are not credit or bridge institutions, and which have fulfilled at least two of the following three criteria in the last two financial years before January 1, 2020:
    • balance sheet total ≥ € 43 million
    • turnover > € 50 million
    • 249 employees (annual average)
  • and
    • which cannot be financed by other means, and
    • for which a clear independent continuation perspective after overcoming the pandemic exists through the stabilization measures, and
    • which were not already in financial difficulty on December 31, 2019, and
    • which (in the event of recourse to guarantee and recapitalization measures) guarantee a sound and prudent commercial policy (in particular by helping to stabilize production chains and safeguard jobs)
  • Excluded from special programs are companies that were already in economic difficulties as of 31 December, 2019 - which can be refuted by:
    • Orderly financial circumstances must be shown
    • Unregulated payment arrears > 30 days, as well as deferral agreements and breaches of covenant must not exist
    EU-Commission Guidelines on State aid for rescuing and restructuring non-financial undertakings in difficulty (Official Journal of the European Union, C 249/1 of July 31, 2014) concretizes the criteria of the “undertakings in difficulty”
    • Insolvency maturity exists or insolvency proceedings have already been initiated
    • The equity base is: (selection analogous to the start-up loan)

In individual cases, also decisions on smaller enterprises can be made, provided that they are active in one of the sectors listed in Section 55 of the Foreign Trade and Payments Regulation or are of comparable importance for security or the economy.

Scope of the Economic Stabilisation Fund

  • Basis: Financial Market Stabilization Fund Law of October 17, 2008 (BGB1. I p. 1982). Last amended by Article 7 of the Law of July 10, 2018 (BGB1. I p. 1102) shall be extended by § 2 "Economic Stabilization Fund".
  • The Economic Stabilization Fund serves to stabilize companies in the real economy by overcoming liquidity shortages and by creating the framework conditions for strengthening the capital base of companies whose continued existence as a going concern would have a significant impact on the economy, technological sovereignty, security of supply, critical infrastructures or the labor market.
  • Time limit: Stabilization measures of the Economic Stabilization Fund are possible until December 31, 2021.
  • The Federal Ministry for Economic Affairs and Energy acts as contact for companies. Competent for the assessment of applications for
    • guarantees up to a volume of € 100 million is the KfW;
    • guarantees of between €100 million and €500 million and recapitalisations of up to €200 million is the Federal Ministry for Economic Affairs and Energy and the Federal Ministry of Finance by mutual agreement.
    • guarantees from €500 million and recapitalisations from €200 million the interministry committee of the Economic Stabilisation Fund.
  • The decision on the application will also take into account a) the importance of the company for the German economy, b) the urgency of the matter, c) the effects on the labour market and competition and d) the principle of using the resources of the Economic Stabilisation Fund as prudently and economically as possible.
  • Financial agencies can demand lump-sum reimbursements from companies for costs incurred pursuant to § 3e German Law to Strengthen Financial Market and Insurance Supervision.
  • Instruments:
    • Guarantees:
      • Authorization of the Economic Stabilisation Fund to provide guarantees of up to €400 billion for debt securities issued until December 31, 2021 and established liabilities (loans and working capital line) of companies for up to 5 years
      • Amount limited to
        • max. twice the amount of wages and salaries including social security contributions or
        • max. 25% of revenues in 2019 or
        • in the amount of the financial requirement for the next 12 months, which is derived from planning in a comprehensible manner
      • Assumption of risk up to a maximum of 90%, whereby all reasonable and economically reasonable collateral must be provided for the loan to be guaranteed.
    • Participations (via credit authorization of up to € 100 billion):
      • Authorization for the WSF to participate in recapitalization measures (acquisition of subordinated debt, hybrid bonds, profit participation rights, silent participations, convertible bonds as well as the acquisition of shares in companies and the assumption of other components of the equity of these companies) of companies at market conditions.
      • Substantiated demonstration of the planning feasibility of achieving independent financing capability (also possible without an expert opinion)
      • Amount limited to a maximum of the amount required to compensate the loss of equity as a result of the Corona crisis and to restore equity in absolute terms or in relation to the balance sheet total (the lower amount is decisive) to the level existing on December 31, 2019 (adjustment may be necessary in view of seasonal business developments).
      • The silent participation is granted until 30.06.2021 at the latest.
      • Loss participation is possible as well.
      • Repayment within 6-10 years according to the agreed repayment plan.
      • Profit participation in the amount of a fixed rate of 4.0% to 9.5% depending on the term
    • KfW loans (via credit authorization of up to € 100 billion):
      • The WSF can grant loans to the KfW to refinance its special programs (see #KfWLoans). The WSF determines the detailed terms and conditions for granting loans on a case-by-case basis.
    Note: More detailed provisions (e.g. consideration, limits, conditions, sector-specific restructuring measures) of the individual instruments may be issued by the Federal Ministry of Finance in agreement with the Federal Ministry of Economic Affairs and Energy by statutory order which does not require the approval of the Bundesrat.

PLUTA provides support for:

  1. Checking the conditions and negotiations
    • Examination of alternative financing possibilities
    • Examination of the criteria for 'firms in difficulty
    • Continuation forecast
    • Negotiation of the individual detailed provisions of each instrument
  2. Submission of financing applications with supporting documents
    • Financial conditions 2018-2019
    • (Integrated) corporate planning for 2020/2021
    • Scenario calculation (period and extent) of the COVID-19 effect
    • Support in case of necessary documentation of the use of funds
  3. Precautionary development of alternative scenarios and accompanying advice on insolvency law

Contact us now

Equity financing for start-ups and small enterprises

With the participation of a venture capital fund

  • Requirements and scope
    • Support from KfW Capital for start-ups and young enterprises,
    • which have a strong connection to Germany,
    • were not in financial difficulties as of December 31, 2019 and
    • in which European private venture capital funds are involved.
  • The support is provided indirectly by the venture capital provider submitting an application to KfW Capital or to the European Investment Fund (EIF) by December 31, 2020.

Without the participation of a venture capital fund

  • Requirements
    • Start-ups and small enterprises in which no venture capital fund is involved or which are seeking additional support. Support will be provided for investments and working capital for enterprises
      • with economic focus in Germany,
      • with a group turnover of max. € 75 million,
    • which were not in economic difficulties as of December 31, 2019. Exception for small and micro enterprises, which neither are in insolvency proceedings under German law nor have received rescue or restructuring aid.
    • The support takes the form of individual mezzanine or equity financing - with a maximum public funding of € 800,000 with full risk assumption.
    • Private investors such as business angels can also be involved in the overall financing.
    • Applications for funding must be submitted to the Landesförderinstitut (see links on the right) or directly to the financial intermediaries involved latest by December 31, 2020.

We will be pleased to advise and support you in applying for various aid programs for your company. Our experienced restructuring experts will provide you with professional advice and guide you safely through the crisis.

*) Small and medium-sized enterprises (SMEs): up to 250 employees / € 50 million turnover
**) Investments: 5 years, max. 1 grace year; operating resources/warehouse: 2 years final maturity or 5 years max. 1 grace year; takeovers: 5 years, max. 1 grace year

further measures to mitigate COVID-19-related economic damages

#ShortTimeWork

  • Application possible retroactively to March 1st.
  • Allowed in case of absence from work by >10% (previously 30%) of the workforce with more than 10% of the salary
  • Full refund of social security contributions
  • Also applies to temporary employment agencies
  • Abstention from building up negative working time accounts
  • Term up to 12 months

#TaxDeferral

  • Application for interest-free deferral of mature and maturing taxes until end of 2020
  • Applications for adjustment of advance payments (income tax / corporate tax / VAT)
  • Refund of advance payments is possible
  • Suspension of late payment penalties / enforcement measures until the end of 2020

#COVInsAG*

  • Conditional suspension of the obligation to file for insolvency until September 30, 2020, if the insolvency maturity is based on the consequences of the COVID 19 pandemic and there are prospects of eliminating the insolvency
    • Insolvency maturity is due to the spread of the COVID-19 virus and
    • prospect of eliminating an existing insolvency if no insolvency had occurred by December 31, 2019
  • Extensive suspension of liability and rescission rules as well as criminal law treatment

#LiquidityAid

  • Liquidity assistance from the Bundesländer for companies and the self-employed (including emergency aid, guarantees, bridging loans, mezzanine)

#CovCivilLaw

  • Temporary right to refuse performance in the context of continuing obligations (for consumers and micro-entrepreneurs**)
  • Temporary deferral within the framework of consumer loan agreements
  • Restriction of the possibility of termination of a rental and lease agreement by the landlord
  • Holding of general meetings and shareholders' meetings by means of electronic communication
  • Measures for holding staff council elections in order to ensure that staff councils as well as works councils have the basic capacity to act and make decisions (implementation planned)

*) Act on the mitigation of the consequences of the COVID-19 pandemic in civil, insolvency and criminal proceedings of March 27, 2020, Federal Law Gazette Part 1 No. 14, 569 ff.

To mitigate COVID-19-related economic damage, further extensive measures by companies are necessary.

PLUTA supports