The federal government plans to use special loans to protect companies suffering from restrictions in the fight against the coronavirus pandemic from bankruptcy. However, according to the savings bank president Helmut Schleweis, the special program of the state development bank KfW will hardly be used by many entrepreneurs.
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Although he was certain “that the number of loan applications for the various funding programs of the federal and state governments would increase exponentially,” Schleweis told the “Handelsblatt”. “But it is also clear that some companies will not be able to help with the existing funding programs.” Many companies that most urgently needed help in the corona crisis could not access the federal and state support programs.
As part of the KfW program, only those companies are given a loan that are expected to be able to repay it within five years. “This is currently not the case for many companies from sectors that are particularly hard hit by the corona crisis,” Schleweis told the newspaper.
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No credit despite a working business model
According to the President of the German Savings Banks and Giro Association, companies from the catering, hotel, event management, catering and travel, transport, logistics, tourism and aviation sectors are particularly affected. These companies often do not get promotional loans “even though they have a working business model when the economy starts up again after the corona crisis”. Because many of these companies live from their ongoing sales, the margins and reserves are relatively low.
So that such companies do not fall through the cracks, politicians have to decide on additional measures. “For such companies, other help than loans is needed to bridge the corona crisis,” said Schleweis. “Direct government grants would be conceivable. Another option would be 100 percent guarantees for loans that will only have to be repaid in the very distant future.”
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The state currently assumes 80 to 90 percent of liability as part of the KfW loan program. The gap of 10 to 20 percent had been heavily criticized by the German Chamber of Industry and Commerce, among others. DIHK President Eric Schweitzer warned of a wave of bankruptcies if applications for aid are not approved by the banks.
The federal and state governments had agreed at the weekend that aid payments from the rescue programs should flow quickly. Up to and including Friday, KfW had 742 applications totaling a good 8.2 billion euros. KfW does not carry out its own risk assessment for loans of up to three million euros per company. There is a simplified check for sums up to ten million euros. Depending on the size of the company, interest rates range from 1 to 2.12 percent for loans with a five-year term.
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Schleweis: Credit and risk assessment “mandatory”
“In the course of the corona crisis, there have been around 300,000 inquiries from corporate customers so far,” said Schleweis. “In about half of the cases, we were able to find an initial solution together with the companies.” In most cases, it dealt with existing loans, and thousands of companies secured additional liquidity through existing lines of credit.
Schleweis, like other representatives of the banking industry, countered allegations from the business community, for example, that the payment of aid would not be quick enough, with reference to credit risks: “Obviously, some understood political communication in such a way that the state is liable for everything. But that is not The state promotional institutions require the house banks for promotional loans that they adhere to standard banking standards. ” A “credit and risk assessment by the house bank” is “mandatory”.
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