BDI Fact Check | Mittelstand & Family Businesses The German Mittelstand
Funding
Are financing requirements for SMEs becoming stricter and more complex?
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One of Germany’s strengths as a business location has been the stable and trustworthy credit market system with relatively low interest rates (Kiel Institute for the World Economy 2020). Sustainable Finance initiatives and the European taxonomy regulation make the financing situation for companies seeking a “green” transformation more difficult. By making the provision of Environment, Social and Governance (ESG) data mandatory for credit lines makes lending and thus, investing, more complicated.
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In addition, the finalization of the “Basel III” guidelines makes loans more expensive for the larger SME sector. It must not restrict the scope for urgently needed investments.
Innovation and investment financing in SMEs Source: KfW (2019)
6%
3%
4% 12%
9%
49%
Innovation
Investment 34%
82%
Internal funds
20
Bank loans
Subsidies
Other sources
