Helping Hand in Crisis

A new business idea to establish when all others go into cover, is not a grateful task. Banks need rescuing umbrellas, big companies go bankrupt. In this situation, development banks a special role to play.
They see their task in itself to lend capital or collateral to, so the chances of the founders of the debt market. The range is enormous, with nearly 200 programs, the founders of public authorities under the arms.

Even though many of them exclusively to the promotion of certain industries set, the choice is vast: “Every business must ultimately decide what to promote his idea is right,” says Marc Evers, of the German Industry and Commerce (DIHK) Topics for the SMEs and start-up is responsible.

The most important point for the financing is the founder federal development bank KfW. 2008 was the volume of business loans at 159.2 million euros, higher than the previous year’s level.

In January 2009, the number of applications compared to the same period last year continued to rise, it is said in the KfW. The Institute awards on its SME Bank, the KfW Start-up money up to 50,000 euros on favorable conditions for business and enterprise, not more than three years on the market. They request the money does not start directly with the KfW, but at their house.

Similarly, equity loans

Alternatively, the KfW SME Bank ERP capital for foundation. Up to 500,000 euros can entrepreneurs get here, such as manufacturing or office equipment. Granted, the injection of funds in the form of a so-called subordinated loan.

Such loans are in some equity criteria of similar design: How to get the creditors in the case of a bankrupt company’s money only after satisfaction of the other lenders. The unfavorable position compared to conventional loans, the sponsors usually pay high interest rates accordingly.

These are the KfW loan again lower than in the free market. With the equity-like financial syringe young companies get not only fresh capital, but also improve its balance sheet ratios.

Technology companies from the corner can also seeks capital from the ERP Start Fund to apply. About this Fund participates KfW even with real equity in companies – without getting involved in the management. Pre-condition is that another investor with at least the same amount in equity is involved.

In addition to the KfW are country-level development banks with their own programs operate founder. The NRW Bank about awards as part of its pilot program to encourage “NRW / EU micro loans” loans from 5000 to 25,000 euros to the founder of micro-enterprises in North Rhine-Westphalia. In addition, the country cooperates with the development bank KfW and helps founders to be reduced further loans.

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