Almost 5000 companies in Germany received a guarantee in 2021.
(Photo: dpa)
Berlin The federal and state governments have agreed to expand economic development through guarantee banks and medium-sized investment companies from the turn of the year. This emerges from a message from the Federal Ministry of Economics, which is available to the Handelsblatt.
The guarantee banks can therefore secure loans in a significantly larger volume from January. The guarantees can then amount to up to two million euros. Previously, the limit was 1.25 million euros.
In the future, medium-sized investment companies will be able to spend up to 1.5 million euros in risk capital instead of the previous one million. In addition, the federal and state governments have agreed on organizational changes that should make guarantees and participations faster and less complicated.
“The increase and improvement in guarantees and equity financing serves to provide greater support for transformation projects that require higher financing volumes than in the past,” said State Secretary for Economic Affairs Michael Kellner (Greens) to the Handelsblatt. The capital requirements for structural change have been increasing for years, according to the federal government’s SME commissioner: “That’s why these are very important measures.”
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In particular, the guarantee banks have been an important support for investment projects of medium-sized companies for years. They have been established since the 1950s. In every federal state there are legally independent guarantee banks, which are supported by chambers, trade associations, credit institutions, insurance companies and development institutions of the federal states. The guarantees they give are in turn secured by the state.
Regulations apply at least until 2027
Guarantees increase the credit opportunities of medium-sized companies: The guarantee banks usually assume at least 50 percent of the credit risk of the house bank. Loans for investments, start-ups, takeovers and liquidity can be secured.
Almost 5,000 companies in Germany received a guarantee in 2021, they secured 1.3 billion euros in this way. On average, 69 percent of the credit risks were assumed in this way. Two thirds of the guarantees were granted for companies with fewer than nine employees.
“With the significant expansion of the upper limits, companies now have planning security that financing can also be used for larger project amounts through the funding instruments guarantees and equity capital,” said Guy Selbherr, Chairman of the Association of German Guarantee Banks.
Medium-sized investment companies do not support small and medium-sized companies in the search for outside capital, but usually directly with equity. The sponsors of the investment companies are very similar to those of the guarantee banks.
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In addition to medium-sized companies, they should help with the development of start-ups. “Medium-sized investment companies make a contribution to the financing of medium-sized companies that should not be underestimated. In principle, expanding your scope is to be welcomed,” says Christoph Stresing, Managing Director of the start-up association.
In 2021, the companies invested 2.9 million euros. At the end of the year, they held shares in a total of 2,800 companies, in which they invested around one billion euros.
The background to the adjustments is that the federal and state governments rework the framework conditions for SME promotion every five years. The new regulations will apply at least until the end of 2027.
Business representatives praise the adjustments. Rainer Kambeck, Head of Economic and Financial Policy and SMEs at the Association of German Chambers of Industry and Commerce (DIHK), spoke of “good news”, especially with regard to the simplification of the application processes. Kambeck added: “However, the federal government should stay tuned here so that the regulations also reach the companies quickly.”
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