“Zero interest” from 1 July 2021 for the financing of digitalisation and innovation projects

Restructuring of ERP promotional loan programmes from 2022- Joint Press Release by the Federal Ministry for Economic Affairs and Energy and KfW

Since 1 July 2021, the Federal Ministry of Economic Affairs and Energy and KfW have significantly improved loan terms for financing digitalisation and innovation projects. Businesses can now finance their projects through the ERP Digitalisation and Innovation Loan at interest rates starting from 0.01%. This will result in significantly lower borrowing costs, especially for the ten-year terms that are currently in high demand.

According to Peter Altmaier, Federal Minister for Economic Affairs and Energy: “Digitalisation and innovation drive structural change. By supporting our businesses in these areas, we are laying the foundation for tomorrow’s growth and jobs. Improved interest terms make it even more attractive to invest in digitalisation and innovation projects. This will be a further boost to the post-coronavirus recovery!”

Dr Ingrid Hengster, Member of the Executive Board of KfW and responsible for domestic promotional business, said: “It’s not just since the coronavirus pandemic that businesses have had to invest more in digitalising their business processes and business models and push ahead with innovation to remain competitive in digital markets. KfW can now provide targeted support to SMEs in their digital transformation and innovation activities by offering attractive interest rate conditions. KfW is thereby contributing significantly to the future viability of the German economy”.

The ERP Digitalisation and Innovation Loan is available to SMEs, freelancers and start-ups to cover financing requirements for digitalisation and innovation projects. Moreover, innovative companies will be able to cover their general investment and working capital needs. Loans of up to EUR 25 million per innovation and digitalisation project and an interest rate starting at 0.01% p.a. mean cost-effective financing of investments and working capital. A repayment-free start-up period of up to two years further reduces liquidity pressure on businesses.

The ERP Digitalisation and Innovation Loan is part of the ERP funding, provided mainly in the form of loans via KfW. ERP funding focuses on start-ups, businesses in structurally weak areas, and on innovation and digitalisation.

As of 1 January 2022, the structure of ERP promotional loan programmes will be simplified and their focus broadened. In future, all small and medium-sized enterprises as defined by the European Commission are to benefit from the favourable financing conditions of the ERP promotional loan programmes.

The ERP Special Fund has now been promoting the German economy for more than 70 years. It originates from European Recovery Program funds and is administered by the Federal Ministry for Economic Affairs and Energy. The funding focuses on small and medium-sized enterprises, which are often at a structural disadvantage compared to large enterprises when it comes to financing. ERP funding contributes significantly to strengthening the competitiveness of small and medium-sized enterprises as well as the liberal professions and helps to create new jobs.