From 15 April, businesses with ten or more employees can access the KfW Quick Loan, with KfW assuming 100 percent of the bank's risk.
The loan is available to all companies with 10 or more employees that have run into difficulties due to the coronavirus crisis. It may be used for acquisitions and ongoing operating costs. The interest rate depends on market conditions and the company's risk assessment by its principal bank. Repayment is over ten years, with up to two repayment-free years possible. Applications can only be submitted through the company's own bank or savings bank. Review and approval by KfW will take place under a fast-track procedure. Applications will be accepted from 15 April 2020.
For more information, see the KfW website directly:
KfW: Coronavirus aid
https://www.kfw.de/KfW-Konzern/Newsroom/Aktuelles/KfW-Corona-Hilfe-Unternehmen.html
NRW.BANK
The NRW.BANK service centre will advise you free of charge on suitable support programmes, for example in the event of production bottlenecks or supply difficulties, on 0211-91741 4800.
https://www.nrwbank.de/de/corporate/presse/corona-hilfe-nrwbank.html
Federal Ministry for Economic Affairs and Energy
The Federal Ministry for Economic Affairs and Energy (BMWi) announces that effective instruments are already available at short notice to support businesses: "In the case of short-term liquidity problems, companies can be supported, for example, with guarantees and KfW (working capital) loans. The programmes are generally open to all sectors and are also available in particular to small and medium-sized enterprises. Micro-businesses and solo self-employed individuals can also receive support. The precondition is that the entity is a commercial enterprise (i.e. not non-profit associations or similar non-profit legal forms)."
The individual federal programmes and their respective conditions can be found here:
To inform businesses and address remaining concerns, the BMWi has set up a coronavirus hotline. It supports you as a business owner with your questions and provides information on the available instruments: 030/18615-1515, Mon–Fri, 9 a.m.–5 p.m.
CURRENT ANSWERS TO QUESTIONS REGARDING SUPPORT LOANS FROM KFW
KfW coronavirus aid: Q&A for advisors
Who can apply?
KfW coronavirus aid is available to small and medium-sized commercial enterprises, freelance professionals and large companies (both young and established).
What characterises KfW coronavirus aid?
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Loan terms have been further improved. Lower interest rates and a simplified KfW risk assessment for loans of up to EUR 3 million provide additional relief for the economy.
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Both investments and working capital can be financed.
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KfW's risk assumption has been significantly increased: KfW assumes 90% of the credit risk for small and medium-sized enterprises (SMEs), 80% for larger companies and for so-called syndicated financing. Coverage is provided by a federal guarantee. The increased indemnity for SMEs is intended to make lending easier for banks and savings banks. The indemnity structure thus distributes the credit risk 10% to the principal bank (applying bank) and 90% to KfW.
What is the interest rate?
- Current conditions at https://www.kfw.de/KfW-Konzern/Newsroom/Aktuelles/KfW-Corona-Hilfe-Unternehmen.html
How is the application submitted?
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Applications are submitted via the principal bank. Disbursements take place as quickly as possible. Simple and unbureaucratic application processing is ensured. KfW issued initial commitments on the very day the programme started.
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Significant streamlining of application processes: KfW has introduced a considerably simplified risk-assessment procedure: specifically, for loans up to EUR 3 million per company, the KfW risk assessment is omitted entirely; KfW takes it over fully from the financing partner. For loan amounts above EUR 3 million and up to and including EUR 10 million, a significantly simplified risk assessment is carried out under an adjusted fast-track procedure. If the fast-track criteria are met for loans up to EUR 10 million, KfW limits the risk assessment to a rating without further documentation. For loans above EUR 10 million, an extended risk assessment applies (greater depth of documentation).
Applicant companies must not have been in difficulty within the meaning of the EU definition as of 31.12.2019. What does this mean? -
The programmes are available to companies that have temporarily run into financing difficulties due to the coronavirus crisis. Specifically, this means that all companies that were not in difficulty as of 31.12.2019 may apply for a loan; i.e. the principal bank has no knowledge of unresolved payment arrears of more than 30 days (see the information sheet "Companies in difficulty" https://www.kfw.de/partner/Dokumente/Archiv/830-2017-Q4/6000000065_M_Beihilfen_2018_01_schwarz.pdf; page 18, point C).
(As of: 26.03.2020)
At the time of application, the company must, on the assumption of a normalising overall economic situation ("as before the crisis"), have a positive going-concern prognosis (no specific requirements from KfW).
What should I do if the 2019 financial statements are not yet available?
Relief agreed regarding documents to be submitted: If the 2019 financial statements are not yet available, the 2018 statements plus a business analysis ("BWA") (as of 31.12.2019) are sufficient. KfW's requirement is thus consistent with that of most principal banks. For loan amounts up to EUR 3 million, KfW even dispenses entirely with the submission of documents.
How can I determine the possible support/financing volume?
The following criteria apply, whichever is selected (the criterion with the highest value is the limiting factor):
Max. 25% of 2019 annual turnover or
Double the 2019 wage costs or
Amount of the current financing requirement for the coming 18 months at most
What should the business owner take to the principal bank?
KfW makes no specifications in this regard.
The principal bank will – as with any lending – request current information on business performance, current figures and possibly further documents. Please speak directly with your principal bank.
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How quickly will the business owner/freelancer receive the funding?**
- For loans up to EUR 3 million, KfW dispenses with the submission of additional documents.
Good cooperation among all parties involved significantly accelerates the processing and provides the funding as quickly as possible. KfW has informed the principal banks and is in continuous contact with them.
What about syndicated financing?
Syndicated financing is generally offered from EUR 25 million. Individual financing structures are possible. KfW accompanies partner banks pari passu ("pari passu declaration"). Risk assessments are carried out in the usual banking manner, but with increased risk tolerance.
Where can I find further information?
https://www.kfw.de/KfW-Konzern/Newsroom/Aktuelles/KfW-Corona-Hilfe-Unternehmen.html
Here you will find questions and answers on KfW coronavirus aid and can subscribe to the corporate financing newsletter, which provides current information on KfW coronavirus aid.
Frequently asked questions
Frequently asked questions
Who can apply for the KfW Quick Loan (Programme 078)?
The KfW Quick Loan is available to companies with at least ten employees that have run into economic difficulties due to the coronavirus crisis. Funds may be used for investments and ongoing operating costs. Applications must be submitted exclusively through the company's principal bank or savings bank and have been accepted since 15 April 2020. The KfW assumes 100% of the credit risk on behalf of the principal bank.
What share of the credit risk does KfW assume under the Corona aid programme for SMEs?
For small and medium-sized enterprises (SMEs), KfW assumes 90% of the credit risk; for larger companies and in syndicated financing, 80%. This is backed by a federal government guarantee. The remaining 10% or 20% is borne by the applicant's house bank, which is intended to facilitate lending.
How is the maximum financing volume of the KfW Corona aid determined?
The eligible funding or financing volume is based on the highest of the following three criteria: a maximum of 25% of 2019 annual turnover, twice the 2019 payroll costs, or the current financing requirement for the next 18 months at most. The highest of these figures forms the upper limit of the loan.
Which documents must be submitted if the 2019 annual financial statements are not yet available?
If the 2019 annual financial statements are not yet available, the 2018 statements together with a business analysis (BWA) as of 31 December 2019 will suffice. For loan amounts up to EUR 3 million, KfW waives the submission of documents entirely and does not carry out its own risk assessment.
What does the requirement of not having been in difficulty as of 31 December 2019 mean?
Under the EU definition, a company is considered not to be in difficulty if, as of the reference date of 31 December 2019, its principal bank was not aware of any unsettled payment arrears exceeding 30 days. Only such companies are eligible to apply for KfW Corona assistance. In addition, at the time of application a positive going-concern forecast must exist, assuming a normalization of the situation.
How does KfW's risk assessment work depending on loan size?
For loans up to EUR 3 million, KfW's risk assessment is waived entirely and handled by the financing partner. For amounts above EUR 3 million up to EUR 10 million, a simplified fast-track review is performed, limited to a rating. For loans exceeding EUR 10 million, an extended risk assessment with more detailed documentation applies.