KfW Loan for Software and Digitalisation

The company finances the programme with a low-interest KfW loan tailored to digitalisation and innovation projects. The loan covers the investment in the platform rebuild and the related systems, with long-term, favourable conditions that match the multi-year payback. On a programme of this size, the financing volume comes to about €3.5 million. As debt rather than a grant, it leaves the company's ownership intact and simply spreads the cost over the loan term.

A KfW loan is applied for through the company's own bank rather than directly at KfW, the so-called house-bank principle. The company discusses the project with its bank, which forwards the application to KfW and passes on the favourable conditions. The loans run for up to ten years with up to two repayment-free start years and an interest rate fixed for the whole term. The interest subsidy and the grant supplement are state aid: if the company combines the loan with a grant, the same costs may only be funded up to the state-aid ceiling, and a loan can often be combined with grant funding on a different part of the project. The decisive advantages over ordinary borrowing are the rate, the term and the grace period, which together match the slow payback of an innovation or digitalisation investment. For a project that is past the stage where grants typically apply, this combination is often the difference between proceeding now and waiting for internal cash to build up.

A substantial digitalisation programme rarely fits a grant, but a low-interest KfW loan provides the capital on favourable, long-term conditions that match the multi-year payback. For a company modernising its systems, it is often the most suitable instrument.

More on KfW innovation loan: The guide KfW innovation loan: terms and application explains the programme step by step. How we support your project is covered under KfW innovation loan consulting.