ERP Innovation Promotion Loan
Loans for innovation projects in SMEs – effective annual interest rate from under 1%*, optional risk assumption by KfW, funding grant up to 5% for demanding projects.
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Grant criteria
Funding objective
Support for innovative business ventures – from basic innovations through LevelUp to high-end projects – including product, process, and service improvements, research and development activities, and their implementation.
Eligible expenses
- Investments
- Operating costs
- Personnel costs
- Costs for materials and equipment
- Contract research
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Non-eligible expenses
- Debt restructuring and refinancing of already completed projects
- Acquisition of own company shares (intra-group transactions)
- Trust arrangements
Eligible to apply
- Companies
- Founders
Funding requirements
- Registered office or place of business in Germany
- SME definition fulfilled (Simplified SME self-declaration)
- Classification of the project in levels 1–3 according to degree of innovation
- Application submission via a house bank or financing partner
Documents required for application
- KfW application form
- Commercial confirmation for the application (gBzA)
- De minimis declaration
- Cumulation declaration
- SME self-declaration
- Identification according to the Money Laundering Act (GWG)
Evaluation criteria
- Degree of innovation of the project
- Growth prospects (revenue increase)
- Effort for research & development
- Involvement of venture capital
Description
The ERP Innovation Promotion Loan offers small and medium-sized enterprises as well as freelancers with headquarters or business premises in Germany an affordable loan solution for innovation and digitization projects. With an effective annual interest rate of under 1%* and a funding rate of 100%, the program enables investments, ongoing costs, personnel expenses, material and equipment costs, as well as contract research and prototype development. For projects with a high degree of innovation (LevelUp and HighEnd projects), an additional grant of up to 5% of the loan amount is available. Optionally, KfW assumes up to 50% of the credit risk to facilitate access for companies with limited collateral and further improve the terms. Financing can be applied for on a project basis in three stages – from simple basic innovations to AI-based HighEnd solutions – and is flexibly scalable with amounts ranging from zero to €25 million.
Companies with annual group sales of up to €500 million and foreign firms with a branch in Germany can apply at any time through their house bank or a financing partner. Required documents include, among others, the self-declaration of SME status, an assessment of the degree of innovation, the commercial confirmation of the application, the de minimis declaration, the cumulation declaration, as well as identification according to the Anti-Money Laundering Act. Loan disbursement is possible up to 24 months after approval in Stage 1 (basic innovations) and up to 12 months in Stages 2 and 3. The program is managed by KfW Bankengruppe on behalf of the Federal Ministry for Economic Affairs and Energy (BMWi) and thus represents a nationwide funding option to strengthen the Mittelstand.
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