The Federal Ministry of Finance, the Federal Ministry for Economic Affairs and Energy and KfW launch a new promotional programme

• “ERP promotional loan for digitalisation” and “ERP promotional loan for innovation” programmes launched on 1 July
• Low-threshold financing with no minimum loan amount for small companies up to large SMEs
• Increasing interest rate advantages and grants with increasing degree of digitalisation or innovation
• KfW Digitalisation Check introduced as a guide

With the new "ERP Promotional Loan for Digitalisation" and "ERP Promotional Loan for Innovation" programmes, the Federal Ministry of Finance (BMF), the Federal Ministry for Economic Affairs and Energy (BMWE), and KfW are further developing their range of support for businesses. The promotion is supported by KfW funds that have been contributed to KfW equity from the ERP special fund (ERP = European Recovery Program) designed to support SMEs.

Both promotional loans offer companies a versatile and low-threshold financing option. Key advantages include increased funding for technologies of the future and the lifting of the minimum loan amount. The latter opens up the opportunity for smaller companies in particular to invest in digitalisation and innovation projects.

Katherina Reiche, Federal Minister for Economic Affairs and Energy said:

"Digitalisation and innovation are the growth drivers of tomorrow – both for corporate groups and for SMEs. KfW is specifically supporting small and medium-sized enterprises with its new financing offers. We finance investments in digital processes, forward-looking technologies and artificial intelligence - so that good ideas can also lead to rapid growth."

Lars Klingbeil, Vice Chancellor and Federal Minister of Finance said:

"Innovation and digitalisation are essential for strengthening Germany as an economic centre. We want to foster innovation and develop a strong digital ecosystem - from start-ups and SMEs to tech giants. This is why funding instruments like these are so important. The new and free 'digitalisation check' will help companies unlock the potential of digitalisation for their company. The promotion ranges from the purchase of hardware and software to innovations related to artificial intelligence."

The funding in both loan programmes is based on incentives and is divided into three stages. The funding levels are staggered in terms of the degree of digitisation or innovation and the relative size of the project. Interest rate advantages and the amount of the supplementary ERP grant increase as the project’s complexity and innovative power increase.

“The introduction of the new promotional loans is an important step towards strengthening the competitiveness of German companies in the digital age,”

said Melanie Kehr, Executive Board Member for domestic promotion at KfW.

"Digitalisation is the key to sustainable growth and increased productivity that permeates all areas of the economy - from bakeries to large industrial companies. With the help of the three-stage structure of low-interest loans, we provide a targeted offer and foster the diversity of SMEs. The newly developed basic promotion enables small and medium-sized enterprises in particular to access financing opportunities."

The newly introduced basic promotion stage is targeted at smaller companies that want to implement simple digitalisation measures or product or process innovations. The maximum loan amount is EUR 7.5 million per project. The LevelUp promotion applies to more demanding projects with a higher degree of digitalisation or innovation. The HighEnd promotion is available for forward-looking projects - for example in the field of artificial intelligence - or for large projects. These are measured in relation to annual revenue. In both stages, applications for up to EUR 25 million can be made per project.

The programmes replace the previous products “ERP Digitalisation and Innovation Loan” and “ERP Mezzanine for Innovation”. They are open to self-employed professionals, sole proprietorships and SMEs with annual revenue of up to EUR 500 million. A registered office or permanent establishment in Germany is a requirement.

A particular highlight of the ERP promotional loan for digitalisation is the KfW Digitalisation Check. This helps companies to determine their current digitalisation status. On this basis, they receive suggestions on how they can further advance digitalisation within the company. The check is compulsory for small and medium-sized enterprises in order to be able to take advantage of the basic promotion of the loan.

The supplementary grant launched in February rounds off the promotion. The amount of the grant is three per cent of the loan paid out for the LevelUp promotion and five per cent for the HighEnd promotion, up to a maximum of EUR 200,000. Applications are submitted together with the loan or within three months thereafter to the applicant's regular bank.

Further information about the programmes can be found here:Promotion of innovation and digitalisation in companies | KfW (in german)

You can access the Digitalisation Check here:www.kfw.de/digitalisierungs-check (in german)

KfW supports SMEs with numerous promotional programmes on behalf of the German Federal Government. Find out more here: Strengthening our SMEs | KfW (in german)

The infographic can be downloaded here: Infographic: ERP promotional loan for digitalisation and innovation(JPG, 476 KB)