Germany Offers Nearly Interest-Free Digitalization Loans

July 2021

The German Ministry for Economic Affairs and Energy and the country’s business development bank, the KfW, have improved credit terms for companies looking to finance digitalization and innovation projects.

The money is being made available as part of the European Recovery Program (ERP), which targets SMEs, freelancers and fledgling companies. Interest rates, particular on ten-year and other popular duration loans, can be as low as 0.01 percent.

“Digitalization and innovation are the motor of structural change,” said Economy Minister Peter Altmaier. “With better interest rates, digitalization and innovation projects are even more attractive. This will provide more momentum for  the post-corona upturn.”

Companies can apply for up to EUR 25 million per project and a two-year grace period before replayents on the principle are due. ERP funds have been used to assist businesses in Germany for more than 70 years and originated in the Marshall Fund following the Second World War. Application procedures are due to be simplified as of January 1, 2021, and the focus of the program will be expanded.

© KfW