How Can the ERP Start-Up Loan Optimally Finance Your Business Acquisition?

You want to buy an existing company instead of starting a new one? With the KfW ERP Start-up Loan, you can optimally finance your business acquisition. As a prospective business successor, you benefit from favorable interest rates, long terms, and reduced collateral requirements.

Why is buying a business often better than starting one from scratch?

Acquiring an existing company offers numerous strategic advantages over a traditional start-up. You begin with an already established customer base and functioning business processes.

Experienced employees bring valuable know-how and ensure smooth operations. Especially in times of demographic change, many entrepreneurs are looking for suitable successors, which increases your chances of a successful takeover.

However, the biggest challenge often lies in financing the purchase price and necessary investments after the acquisition. This is exactly where the attractive KfW funding programs come into play.

Which KfW funding programs are available for business acquisitions?

For financing your business acquisition, you can currently choose between two attractive KfW programs. The classic ERP Start-up Loan – Start-up Capital (067) is particularly suitable for smaller acquisitions.

Since November 2024, the new ERP Promotional Loan for Start-ups and Succession (077) has also been available. Both programs offer specific benefits for business successors and differ in funding amount, terms, and requirements.

The right choice largely depends on the financing volume and the specific needs of your planned acquisition. Let’s take a closer look at the details of both programs.

What does the ERP Start-up Loan – Start-up Capital (067) offer for your business acquisition?

The ERP Start-up Loan – Start-up Capital is specifically aimed at founders and business successors. With this program, you can not only finance the purchase price but also secure necessary investments and working capital after the takeover.

The maximum loan amount is €125,000 for investments and the actual business purchase. Additionally, up to €50,000 is available for working capital needed for ongoing operations.

Particularly advantageous is the 80% liability release for your house bank. This significantly increases your chances of loan approval, as the risk for the bank is substantially reduced.

Financing up to 100% of the costs is possible, meaning you can theoretically start without equity. Flexible terms ranging from 5 to 20 years with grace periods on repayments also give you financial leeway during the critical initial phase.

What advantages does the new ERP Promotional Loan for Start-ups and Succession (077) offer?

Since November 1, 2024, the ERP Promotional Loan for Start-ups and Succession (077) has been available as a particularly attractive funding instrument. This program was specifically developed to facilitate larger business acquisitions and succession solutions.

With a maximum loan amount of €500,000 per applicant, you can finance up to 35% of an acquisition project. The 100% guarantee assumption by a guarantee bank fully relieves your house bank of default risk.

Especially favorable interest rates through funds from the ERP special fund make this program financially very attractive. Apart from your personal liability, no additional collateral is required, which significantly eases access to financing.

The 80% federal government re-guarantee for guarantee banks creates additional trust in the financing process. For larger acquisitions, the ability to combine this program with other funding programs and risk coverage instruments is a decisive advantage.

Which funding program best suits your project?

The decision between the two funding programs should be based on the required financing volume. For smaller acquisitions with financing needs up to €125,000, the ERP Start-up Loan – Start-up Capital (067) is recommended.

For more extensive projects, the ERP Promotional Loan for Start-ups and Succession (077) with up to €500,000 is the better choice. Note that only up to 35% of the total project can be financed here.

For larger acquisitions, the ability to combine with other financing instruments is an important factor. Careful planning with professional advice will help you develop the optimal financing structure for your individual situation.

How does the application process for KfW funding work?

The path to funding in both cases leads through your house bank as the first point of contact. Start by preparing a detailed business plan and gathering all necessary documents for the application.

Have a thorough discussion with your house bank before you begin the business acquisition. This is crucial because subsequent applications are not possible — the application must be submitted before the project starts.

For the new ERP Promotional Loan for Start-ups and Succession, your house bank submits the guarantee application to the responsible guarantee bank. This is done via the central platform kapital.ermoeglicher.de, which simplifies the process.

After the guarantee is assumed, the house bank applies for the refinancing loan from KfW, which reviews and approves the application. After a positive decision, you can sign the loan agreement and draw down the loan amount for your business acquisition.

What documents do you need for a successful funding application?

For a successful application, you need similar documents as for a conventional bank loan. These include the financial statements of the company to be acquired from the last 2-3 years as well as current business evaluations (BWA).

Prepare detailed planning documents for the period after the takeover that outline your vision and financial forecasts. Certain programs also require an SME declaration, De-minimis declaration, and other formal documents.

Thorough and complete preparation of these documents significantly increases your chances of funding approval. A professional advisor can assist you in this important step and ensure all requirements are met.

Why is the timing of the application so important?

Be sure to submit the funding application before starting the acquisition process. KfW explicitly emphasizes: "Important: Apply for your funding loan with your financing partner before you begin your project."

Start planning your financing early, ideally several months before the planned acquisition. This gives you enough time to prepare all documents and complete the application process.

Timely application not only secures your access to funding but also provides planning security for your business acquisition. Subsequent applications are generally not approved, even if the project would be eligible.

Why should you insist on using funding programs?

Experience shows that house banks sometimes hesitate to forward funding applications because it involves additional effort for them. Therefore, insist persistently on using funding programs, as their benefits for you are considerable.

Low interest rates, long terms, grace periods, and reduced collateral requirements make KfW funding loans an ideal financing instrument. These financial advantages can be decisive for the success of your business acquisition.

Inform yourself well about the available programs and present well-founded arguments to your bank. If difficulties arise, you can also engage an experienced financing advisor to support you in the application process.

How do you secure the long-term success of your business acquisition?

With KfW funding programs, you can lay the financial foundation for a successful business acquisition. The favorable terms improve your liquidity in the critical initial phase after the takeover.

Use the grace periods to make necessary investments and position the company for the future. The long terms provide planning security and enable a solid financing structure.

Don’t forget that besides financing, careful onboarding and a well-planned transition are crucial for success. A structured handover phase with the previous owner secures valuable know-how and customer relationships.

Conclusion: Your path to business ownership with optimal funding

KfW funding programs offer ideal financing options for your path to business ownership through acquisition. With the classic ERP Start-up Loan – Start-up Capital and the new ERP Promotional Loan for Start-ups and Succession, two powerful instruments are available.

Especially the new funding program, with its 100% risk assumption by guarantee banks, provides an important impetus for succession financing in Germany. By strategically using these funding options, you can place your business acquisition on a solid financial foundation.

Take the opportunity to become an entrepreneur with state support — not through a complete new start, but by taking over an established company with future potential. The right financing mix is a decisive success factor for your start as a business owner.

Further information on financing and funding

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