2014 corporate survey

• Upturn boosts returns on sales
• Few difficulties gaining access to credit, except for small, young companies
• Potential for investments in area of energy-efficiency, especially for small enterprises
• 60% of companies satisfied with their region as a place to do business

German companies are doing well financially, and the financing situation has even improved over the past 12 months. Only 18% of companies report an increase in difficulty obtaining credit ‒ four percentage points fewer than last year. Never before since the survey was first conducted in 2001 have so many companies of all different sizes given such a positive assessment of the financial climate as they have now.

There is, however, one problem despite all this encouraging news: small and young companies are finding it more difficult to gain access to credit. Among small companies with turnovers of less than EUR 1 million, 28% report difficulties obtaining credit. This rate is four times higher than for larger companies with turnovers in excess of EUR 50 million (7%). Among young companies (established within the last six years), 24% reported difficulties. Small and young companies are also hardest hit by far-reaching restrictions on credit, such as higher collateral requirements and rejections.

"As positive as the findings of the corporate survey appear, we cannot allow ourselves to rest on our laurels. Small and young companies always need our support. The creative and innovative ones in particular need credit in order to be able to bring their ideas to fruition. And we need the boost that those ideas give to the economy. KfW will continue to be here for you," stated KfW's CEO Dr Ulrich Schröder at the presentation of the study in Berlin.

"Retailers need stable terms of financing, especially given the structural changes currently taking place. But even the best loans in the world are of little use if the money then flows into the unfair and often crisis-exacerbating trade tax. It is therefore a matter of urgency for politicians to work on reform, especially with respect to the rules on addition, in order to end the practice of levying tax on losses, which can put the very existence of companies at risk in some cases," commented Stefan Genth, Managing Director of the German Retailers' Association (HDE).

The 2014 corporate survey also found that companies are implementing the energy turnaround. In the past three years, 49% of respondents had implemented measures aimed at reducing their energy consumption, while 18% plan to do so. The aim is to reduce energy costs. Larger companies in particular are leading the way here.

However, the available potential is far from exhausted. Reasons for holding back include a lack of information, a shortage of personnel for planning and implementing energy-efficiency measures, and insufficient sources of financing, particularly for small enterprises. The expectation of short amortisation periods also acts as a brake. It is therefore appropriate for funding to target this issue.

Companies' satisfaction with their regions as places to do business is high (60%), with larger companies reporting higher levels of satisfaction. Companies in Baden-Württemberg, Berlin, Hamburg, Hesse and Bavaria gave the most positive assessments of conditions in their region. The main factors that determine a location's appeal are the availability of qualified employees and the transport infrastructure. Networking opportunities such as proximity to suppliers and customers, and collaboration with other companies, authorities and banks also play an important role in the quality of a location.

The study "Corporate financing 2014: financially strong, energy-conscious, location-sensitive" and all the press conference documents can be viewed at www.kfw.de/Unternehmensbefragung2014 (in german) in the "Press" section.