The EU and Business in Germany
A variety of supports from the European Union are available to businesses in Germany. These supports, including financing, help promote the growth of businesses in Europe as part of the EU's economic development, cohesion, and regional development objectives. Access to financing is essential for starting or expanding a business, especially for smaller enterprises. The EU offers businesses including indirect and direct grants, loans and guarantees. Funding is available directly in the form of grants or indirectly from national and local agencies.
Financing is available from various sources for businesses of different sizes, including micro businesses with less than 10 employees and small and medium sized enterprises (SMEs) with up to 250 employees. To be eligible, micro businesses must have an annual turnover or balance sheet total of under €2 million, while small enterprises must have a turnover or balance sheet total of under €10 million. Medium-sized businesses must have an annual turnover of under €50 million or a balance sheet total of less than €43 million to be eligible. Individual programmes may have additional criteria for eligibility.
German businesses are eligible for direct funding from the European Commission or executive agencies in the form of grants. This funding may be used to finance businesses and projects in order to contribute to fulfilling specific EU policy objectives. These policy objectives relate to the environment, competitiveness, training, and research and development. To apply for direct grants from the European Union, businesses in Germany must respond to calls for proposals. These calls for proposals are issued by the European Commission and posted online. Eligibility requirements for grants vary depending on each individual grant. These rants are generally not geographically specific and are open to all EU-based businesses.
The EU does not issue direct loans, guarantees or equity to businesses in Europe. Instead, local and national intermediaries are used to provide financing guaranteed by the EU, such as loans and equity. This financing may be used by German businesses to start up or expand a business, including tangible and intangible investments. Individual financial intermediaries such as banks and other lenders may set up individual eligibility criteria. They may also determine how funds are borrowed on a case-by-case basis.
The EU's Competitiveness and Innovation Framework Programme (CIP) facilitates access to loans and equity for small and medium sized businesses where there are market gaps. CIP supports businesses of all sizes, including micro-entrepreneurs. In Germany, CIP funding is available through a variety of financial intermediaries. Focus areas include the expansion of businesses in green and green energy sectors, including the commercialisation of clean energy and the development of environmental and sustainable energy technologies.
The European Investment Bank (EIB) also provides loans and guarantees for research, development and innovation to German businesses. The Fund is available for venture capital and private equity funds, banks, guarantee institutions, microfinance providers, corporate investors, business angels, SMEs, job seekers and journalists. Financing in the form of loan guarantees is provided through the European Investment Fund (EIF), which is part of the EIB and specialises on risk finance for small and medium enterprises. Certain EIF funding is targeted for traditional industries with a clear potential for growth. Other EIF financing focuses on emerging sectors, such as communications, social and digital media, energy, e-commerce, biotechnology, pharmaceuticals and healthcare, life sciences and biomedical technology, and information technology.
The EU also allows member states to use structural funds to support businesses. In Germany, structural funds and other national sources of finance are used to provide equity and venture capital to businesses through financial intermediaries. Funding is targeted and is available on a regional basis or for businesses in focus sectors. Key sectors include life sciences, advanced mechanical engineering, coating technology, chemistry and process engineering, energy and environmental related technologies, nanotechnology, microelectronics, media and marketing services.
Enterprise Europe Network
The Enterprise Europe Network provides a business support and innovation network for SMEs in EU and non-EU countries. It offers information about EU programmes and policies, as well as advice to businesses on public procurement, EU regulations and legislation, financing, business cooperation, innovation, market research, and technology transfer. The Enterprise Europe Network is also useful for businesses interested in applying for EU grants and projects. Enterprise Europe Network branches are located throughout Germany, including Berlin, Bremen, Dresden, Hamburg, Hannover, Leipzig, Magdeburg, Munich, Nuremburg, Rostock and Stuttgart. Additional information about the Enterprise Europe Network is available at http://een.ec.europa.eu.
Finding More Information
Calls for proposals for direct grants from the European Union may be found at http://ec.europa.eu/contracts_grants/grants_en.htm. A list of financial intermediaries that provide EU indirect funding to German businesses is available at http://europa.eu/youreurope/business/funding-grants/access-to-finance/. Contact information for local delivery agencies may also be found at http://ec.europa.eu/regional_policy/manage/authority/authority_en.cfm. Additional information about financing through the EIB is available at www.eib.org.