The German government has been hard at work, scrambling for ways to soften the damage caused by the coronavirus pandemic. Chancellor Merkel made it clear that the country had not experienced such economic turmoil since World War II. As Europe’s financial giant, the federal government is offering citizens finance options for anyone who lost an income due to the COVID-19 pandemic. This is in addition to the government grants, tax relief measures, and the 1.1 trillion euro coronavirus crisis package.
The ministry of finance announced that Berlin would offer 100% guarantee on loans initiated by small and medium enterprises. The guarantee entails up to 500,000 euros to distressed companies of up to 50 employees, and a further 800,000 euros for larger companies.
On April 30, the federal minister of Education extended compensation to assist students with an interest-free loan of up to €650 a month. Also, a non-repayable fund of €100m for students in an acute emergency. Here is a list of a few other COVID-19 loan programs.
KfW Instant Loan 2020
The KfW Instant Loan 2020 is offering credit amount to the value of €800,000 for companies with more than 50 employees and €500,000 for companies less than 50 employees. This loan is aimed at assisting small to medium enterprises with acute liquidity. The loan application is intended to be easy with no risk assessment by the financing bank. Companies with more than ten employees and have been on the market since 2019 may qualify. The company must have generated profits in the same year, alternatively, accumulated profit over the last three years with no financial difficulties before December 31 2019.Â
KfW Entrepreneur Loan / ERP Founder Loan
The KfW Entrepreneur Loan is targeted at businesses that are active and have been on the market for no less than five years. To qualify, the company should demonstrate no financial difficulties before December 31 2019. Qualifying companies will receive a loan of up to €1 billion, depending on positive financials and the size of the company.
KfW Special Program for Syndicate Financing
For medium to large enterprises seeking working capital or an investment project, there’s the KfW Special Program for Syndicate Financing. Eligible companies include those explicitly affected by the COVID-19 pandemic. Also, the company should demonstrate plans to invest in the country with no financial difficulties up until December 31 2019. The financing program is dependant upon market value, with a KfW loan share of at least €25 million. The loan term is for up to six years, and KfW will assume 80% of the default risk.
For more information on all the terms and conditions, as well as the loan application process, visit KfW homepage.
Consumer loan agreements
Consumers who took up loans before March 15, 2020, repayments may be postponed by three months from the due date, in the event the consumer suffers a loss of income caused by the pandemic.Â
The Federal Government and Ministry of Finance are continually updating information on finance schemes and available loans related to the COVID-19 pandemic.Â
Read Also: Tax Relief To Assist Germans During COVID-19 Crisis.