Status: 12/08/2022 3:31 p.m
In order to cover the increasing capital requirements in the structural change, the federal and state governments want to give SMEs more support from 2023. Higher guarantees should be granted for financing.
The federal and state governments are expanding the funding opportunities via the guarantee banks and medium-sized investment companies from next year. From January 1, 2023, the guarantee banks can take on up to two million euros, as the Federal Ministry for Economic Affairs and Climate Protection (BMWK) announced today in Berlin. So far, borrowers and lessees have not been able to take out more than EUR 1.25 million.
In addition, the medium-sized investment companies are to support them with up to 1.5 million equity capital in the future. So far it was only one million euros.
More money for transformation and structural change
“Increasing and improving the guarantees and equity financing serves to provide greater support for transformation projects that require higher financing volumes than in the past,” said Parliamentary State Secretary at the BMWK, Michael Kellner, explaining the measures. In addition, the capital requirements for structural change – i.e. combating the shortage of skilled workers and the effects of technological change – have been increasing for years.
The guarantee banks and the medium-sized investment companies are publicly funded self-help institutions for medium-sized companies. They are supported by the Chambers of Commerce and Industry, the Chambers of Crafts, banks, insurance companies and associations. By assuming financing risks, they facilitate start-ups and the expansion or succession of small and medium-sized companies. Every five years, the general conditions of the corresponding contracts between the federal government, the federal states and the guarantee banks are revised.
The Association of German Guarantee Banks (VDB) welcomed the expansion of funding opportunities. “With the significant expansion of the upper limits, companies now have planning security so that financing can also be provided for larger project amounts through the funding instruments of guarantees and equity capital,” says VDB Chairman Guy Selbherr.
“Small and medium-sized companies draw hope”
Meanwhile, the mood among German medium-sized companies has recently lifted due to the dwindling concerns about a gas shortage and the aid from the federal government. The business climate for small and medium-sized companies improved in November, as the state development bank KfW reported yesterday in its SME barometer with the Munich ifo Institute. This rose by 3.6 points to minus 19.7 balance points.
The reason for the easing of the depressive mood was therefore a significant increase in business expectations, while the situation was assessed somewhat worse than in the previous month. “Small and medium-sized companies are drawing some hope again,” said KfW chief economist Fritzi Köhler-Geib on the results. The current barometer suggests that many companies are pricing out the great risk of a gas shortage this winter and are probably also saying goodbye to their greatest concerns as a result of the latest relief package.
“If there is no new bad news, then the trend reversal in business expectations could be confirmed in the next few months,” added the economist. Despite the recent silver lining, business expectations are currently still about as pessimistic as at the beginning of the corona or financial crisis. For example, the Association of German Chambers of Industry and Commerce (DIHK) is expecting hard times to continue, as energy-intensive companies are suffering from high gas and electricity prices.