Keep the overview: These corona funding schemes are available in Germany


The COVID 19 pandemic is not only a stress test for companies, but often confronts them with existential financing questions. With this article, we would like to navigate you through the federal and state governments’ various government support measures and give you an overview of the most important funding schemes in Germany.

All funding measures require that a company has not already been in financial difficulties before December 31, 2019. This is not only the case when the conditions for (creditor) insolvency are met, but already if more than half of the subscribed share capital/equity has been lost as a result of accumulated losses or if certain key figures have been violated. Furthermore, the company must be structurally sound and competitive in the long term despite temporary financing difficulties.

I. Interim aid (non-repayable grants)
  • Interim aid for small and medium-sized enterprises (SMEs) and social enterprises (e.g., non-profit enterprises) with a maximum funding of EUR 150,000 (EUR 50,000 per month for three months)

  • Decline in sales due to the Corona pandemic of at least 60% on average in April and May 2020 compared to the average sales in April and May 2019

  • In some cases the interim aid is topped up by individual federal states.

II. Promotional loans

Promotional loans within the scope of the Corona crisis are provided both by KfW and the federal states’ promotional institutions. The loans granted by the federal states’ business development banks are structurally similar to the KfW loans presented below. Applications must generally be filed through the main bank.

1. KfW special program 2020

a) Entrepreneur loan/start-up loan

  • Support of companies (SMEs or large companies) / freelancers who have been active on the market for at least 5 years, financing of working capital and investment costs
  • Risk assumption by KfW up to 80 % (large companies) and 90 % (SMEs), additional bank security required
  • Start-up loan comparable with the entrepreneur loan; intended for companies which have been active on the market for three years and less than five years

b) Quick loan

  • Financing of an enterprises’ acquisitions and current expenses (> 10 employees, on the market since January 1, 2019; profit equal to the 2017 – 2019 average profit)
  • Maximum loan amount EUR 500,000/800,000, depending on the number of employees
  • 100 % risk assumption by KfW towards the main bank

c) Syndicated loan

  • Syndicated financing with KfW’s participation as consortium partner
  • Risk assumption of up to 80%; total debt 50%
2. Protective shield for supplier credits

Federal Government guarantee for compensation payments by the credit insurers of up to EUR 30 billion in order to guarantee the maintenance of existing cover notes and the granting of future cover notes during the Corona crisis.

III. Stabilization fund

1. Federal Economic Stabilization Fund

  • Aid for larger enterprises with no other means of financing which do not meet the SME criteria 
  • Criteria for granting: importance for the German economy, urgency of granting, effects on the labor market and competition, economical and efficient use of funds
  • Stabilization measures: 
    • Temporary provision of guarantees for debt instruments and liabilities against fair market remuneration
    • Recapitalization of a system-relevant company through the acquisition of subordinated debt or the acquisition of equity at fair market conditions
2.  Stabilization fund at state level

Establishment or planned establishment of funds in some federal states (such as Bavaria, Saxony, Baden-Württemberg) also for SME based on the model of the Economic Stabilization Fund

IV. Guarantee schemes
  • Extension of the guarantee banks’ existing guarantee schemes for default guarantees at federal and state level; coverage of a credit requirement of up to EUR 2.5 million (guarantee ceiling) with a covered default risk of up to 90%, in some cases 100% for small enterprises with loans of up to EUR 250,000
  • Parallel federal/state guarantees (large guarantee schemes) in order to secure loans to commercial enterprises with a viable concept (risk assumption up to 90 %/50:50 risk sharing between state and federal government) also outside structurally weak regions (limited until December 31, 2020)


V. Support for companies in the start-up phase

As part of the Corona aid package, the government has taken extensive support measures for start-ups, growth companies and smaller medium-sized enterprises.
Pillar 1: Corona Matching Facility (CMF)

  • Granting of additional public funds for start-ups’ financing rounds by KfW Capital and the European Investment Fund in favor of private venture capital funds (so-called matching)
  • Matching limit: max. 50 % CMF funds, matching rate: max. 70 % public funds in relation to private funds at financing round level
  • Pillar 2: Mezzanine and equity financing
  • For start-ups and small medium-sized enterprises with no access to Pillar 1
  • Granting convertible loans and entering into silent and direct participations up to EUR 800,000 through the state-owned investment companies
VI. Next Generation EU
  • Agreement of the European heads of state and government on the "Next Generation EU" development instrument proposed by the EU Commission on July 21, 2020
  • Total framework of EUR 750 billion, comprising EUR 390 billion in non-repayable aid and EUR 360 billion in loans
  • More specific information on the national legal structure will probably only be available after the European Parliament and the national parliaments’ vote

This overview is based on the status of August 6, 2020. As the past and the above outlook show, new financial aids are constantly being issued, the conditions of existing financial aids are changed and supplemented or updated interpretations are made available via FAQs. In addition to this overview, we inform you about these updates on our homepage in the "News" section.

Do you have further questions? Please do not hesitate to contact our financing specialists Heinrich Thiele and Markus Niebel.