Bank financing and promotional loans for international investors in Germany

International investors who want to invest in Germany or set up a company have various financing options. In addition to traditional bank loans there is State funding programswhich support investments with favorable loans or guarantees. These financing options are particularly attractive as they often Better conditions than conventional bank loans offer.

1. traditional bank financing for investors

International investors in Germany can Commercial loans from banks received. The conditions depend on Creditworthiness, equity ratio and investment purpose from.

Important types of credit:
- Investment loans - for long-term investments such as real estate, machinery or production facilities
- Working capital loans - to finance current business expenses
- Export and foreign trade credits - for companies that work with international suppliers and customers
– Real estate financing for commercial projects - for companies that buy or develop commercial real estate

Requirements for a bank loan:

• Good credit rating of the company or investors
• Solid business plan with realistic financial forecasts
• Collateral such as real estate, machinery or guarantees
• Equity ratio of at least 10-25 % of the investment amount

Tip: If the company Not yet high equity has or offers only limited collateral, a State subsidy or guarantee help to improve financing opportunities.

2. promotional loans for investors in Germany

In addition to traditional bank loans, there are special State promotional loansthat provide financial support to companies in certain areas. These loans often have More favorable interest rates, longer terms and redemption-free start-up years.

Important funding programs:

a) KfW promotional loans (State development bank)

The KfW (Reconstruction Loan Corporation) offers low-interest loans for companies and investors. Particular support is provided:
Start-ups and company takeovers
-Investments in sustainable technologies and digitalization
-Energy efficiency measures in companies
–Innovations and research

Examples of KfW loans:

• KfW Entrepreneur Loan - for existing companies investing in Germany
• KfW loan for growth - for greater investment in digitalization and innovation
• ERP start-up loan - especially for start-ups and young companies

Special features:

• Favorable interest rates
• Repayment-free start years
• Application via a House bank (KfW does not grant loans directly to companies)

b) Regional development banks of the federal states

Every German federal state has Own development bankswhich specifically support companies in the respective region. These development banks often offer low-interest loans or grants for investments in certain sectors or structurally weak areas.

Examples of regional funding programs:
-LfA Förderbank Bayern - for companies in Bavaria
-Investment Bank Berlin (IBB) - for companies in Berlin
-Bank of Lower Saxony - Promotion for investors in Lower Saxony

Tip: The conditions of the regional development banks are often more flexible than with large commercial banks. It is therefore worth checking these subsidies at an early stage.

c) Guarantees for foreign investors

If a company insufficient collateral has to obtain a bank loan, you can take out a Guarantee bank help. These institutions assume part of the risk and thus facilitate the granting of loans.

Types of guarantees:

• State guarantees - by the federal states for investments in structurally weak regions
• Guarantee programs for innovations - for companies that develop new technologies

Tip: Banks grant loans ratherif a guarantee offers a certain degree of security for repayment.

3. alternative sources of financing for investors

a) Private investors and venture capital

• Especially for Start-ups and innovative companies interesting
• In addition to capital, investors often also bring valuable contacts and know-how

b) Mezzanine capital (combination of equity and debt capital)

• Hybrid form between equity and loan
• Often as a silent partnership or subordinated loan

c) Crowdfunding and crowdinvesting

• Financing via many small investors
• Particularly popular for start-ups or sustainable projects

d) Export credit financing

• Especially for companies that conduct international trade transactions
• Often in combination with state insurance

4. requirements for successful financing in Germany

-Solid business plan - Banks and funding institutions closely examine the company's prospects of success
-Equity or collateral - Banks usually require a certain financial contribution
-Good credit rating and transparent finances - Lenders analyze the company's financial situation
–Use suitable funding programs - Combination of bank loan and development loan can improve financing conditions.