Until recently, business successors named difficulties with financing as one of the main risks in their project. LfA Förderbank Bayern’s start-up loan is not only attractive for business founders, but also as a building block for financing business succession.
The Bavarian development bank thus joins the ranks of state-owned development banks that finance business successions at particularly favourable conditions. IFB Hamburg recently launched the Hamburg Credit Foundation and Succession a similar programme.
The target group of this loan are founders and business successors of small and medium-sized commercial enterprises in industry, trade, commerce, road transport, the hotel and restaurant industry and other service industries, as well as members of the liberal professions.
There are two different programmes, the Start Loan and the Start Loan 100:
- Start-up credit: From an investment volume of EUR 25,000, this promotional loan offers significantly more favourable conditions with different terms compared to the market interest rate. Different terms with grace years can be agreed upon.
- Start-up credit 100With this financing module, the start-up loan can be increased to up to 100% of the investment amount. The interest rates for the Start-up Loan 100 are in the lower range of the usual market rates.
For both models, there can be a liability exemption of 70%. The application for financing must be submitted to the LfA via the borrower’s bank. The processing time for the loan is between 6 and 12 weeks.
Here is an up-to-date overview of both Programmes and their Conditions.
The start-up loans are realised from budgets of the Free State of Bavaria in cooperation with KfW Bankengruppe and LfA Förderbank Bayern.
For the Memmingen-based management consultant specialising in business successions Norbert Lang these subsidies provide a significant impetus for the generational change in Bavarian family businesses: “This provides company successors with essential assistance in structuring their financing,” he adds: “Now it’s just a matter of finding the right company for the successor. He adds: “Now it’s just a matter of finding the right company for the successor. As specialists, we are happy to take on this search.”
His Munich colleague Holger Habermann points out that when applying for these subsidies, start-ups and business successors should go to great lengths to prepare a business plan that complements the application: “Clean financing documents must also be submitted for publicly subsidised financing. Similar high standards apply here as with pure bank financing.”
