The Hamburgische Investitions und Förderbank today presented its new support programme for business successors and start-ups.
Hamburgische Investitions- und Förderbank (IFB Hamburg), in cooperation with Bürgschaftsgemeinschaft Hamburg GmbH (BG), grants investment and working capital loans for start-ups and business successions at very favourable conditions. The favourable interest rates are made possible by a subsidy from the Senate of the Hanseatic City.
Below we answer the most important points about the new funding programme:
Who is supported?
- Start-ups,
- small and medium-sized enterprises (SMEs) craft enterprises,
- Freelancers (e.g. doctors/tax consultants/architects),
- other service providers,
The prerequisite is that these companies or entrepreneurs have not been active on the market for longer than 5 years.
What is promoted?
- All investments and active participations (from 10 %) in Hamburg that require a long-term provision of funds and can be expected to achieve long-term economic success.
- Working capital including inventory to compensate for growth-related liquidity needs, to expand business activities and to compensate for temporary liquidity bottlenecks (based on the existing business plan).
Under what conditions are the subsidies available?
Funding is available for up to 100 % of eligible costs. Maximum 500,000,? ? per project, up to 1,000,000,? ? (in 3 calendar years) per borrower unit, taking into account the respective guarantee ceiling of the guarantee community.
How high is the own contribution for receiving the funding?
For loans up to and including 150,000,? ? the own funds portion is 10 % of the project, from 150,000,? ?, own funds amounting to 15 % must be provided.
For working capital financing, the term is 5 years with fixed interest conditions. For investment financing, terms of 5, 7, 8 or 10 years with fixed interest conditions are possible. The first year is always repayment-free.
What is the special feature of this funding programme?
The highlight is: for a loan up to and including 150,000,? ? an interest rate is agreed that is independent of personal creditworthiness and the collateral available.
If the loan is larger than 150,000,? ? a customer-specific interest rate is set, just as with a bank, taking into account the borrower’s economic circumstances and BG’s default guarantee as well as the value of the collateral provided for the loan.
However, this is still very attractive at less than 2% per annum as of 21/11/2014.
What else needs to be considered?
The so-called “house bank principle” applies to these subsidies. The application must be submitted to the entrepreneur’s house bank before the start of the project. The loan is secured in accordance with standard banking practice. The form and scope of the collateral is agreed between the borrower, the credit institution and the guarantee association.
The following documents are required for the application: Project concept (investments) incl. cost estimates, company presentation, planning documents (balance sheet and BWA) for the next 3 business years or current BWA and balance sheets of the last 3 years as well as earnings forecast and liquidity planning (operating funds) for the next 3 business years.
This is how it works
- Contact your bank advisor.
- Apply for the loan at a credit institution of your choice including a BG default guarantee. If you wish, IFB Hamburg will forward your guarantee application to BG.
- BG examines your guarantee application and informs you, your credit institution and IFB Hamburg of the result.
- IFB Hamburg will check the eligibility of your application and inform your credit institution.
- Conclude the contract at your credit institution.
- Have your credit institution draw down the funds.
- Start your project.
How long does the application process take?
According to the IFB, a decision will be made within 4-6 weeks. The prerequisite is that all documents for applying for funding are complete.
More information is available here: http://www.ifbhh.de/wirtschaft/gruendung/hamburg-kredit-gruendung-und-nachfolge
