The specifics of the funding system
Funding in Berlin is not limited to a certain phase; it is available to companies during all steps of development. The following may be combined:
- Investment funding
- Funding for innovation
- Aid in engendering greater internationalization
- Support for consulting
The company size is the most important factor for the amount of funding for most of the programs. In most options, the highest funding rates are for the small or mid-sized (SME) enterprises.
The European Commission has developed a classification system, valid across Europe:
|Small enterprise||< 50||≤ EUR 10 Million||or||≤ EUR 10 Million|
|Mid-sized enterprise||< 250||≤ EUR 50 Million||or||≤ EUR 43 Million|
|Large enterprise||≥ 250||> EUR 50 Million||or||> EUR 43 Million|
|The category “Employees” is obligatory. Along with it, either “Turnover” or “Total Assets” is used to determine the size of the company.
Types of funding:
All funding instruments can essentially be placed in two categories:
- 1. Funding for direct investment costs and
- 2. Funding for operative costs.
The difference types are:
Grants, not to be re-paid (GRW)
Funding for certain investment projects is possible in Berlin through GRW, the Joint Task for the Improvement of Regional Economic Structures. The goal of the funding program is to assist with relocation, expansion and diversification projects by providing assistance during the initiation and consolidation phases. The program aims to add incentives to investments which will improve the regional economic structure. Large companies receive grants of up to 10% of the costs eligible for funding, mid-sized enterprises up to 20% and small companies up to 30%.
Actual investment costs in fixed assets (interior fixtures and renovations, equipment, software, etc.) serve as the basis for calculating potential total funding for an investment project. In certain circumstances, funding for personnel costs is also possible. The application for GRW funding must be submitted before the project commences.
Loans from public funding sources are offered on both a national and a local/state level for investment projects planned within Berlin. These loans are an attractive complement to classical forms of financing because of long interest terms, interest deductions for SMEs and indemnity conditions for the credit institute (home bank).
In order to aid the process of receiving loans from the home bank, the state of Berlin offers „Ausfallbürgschaften,“ or (default) securities through the Bürgschaftsbank Berlin Brandenburg (up to 1.25 million EUR), through the IBB (more than 1.25 million EUR) or through the German government. These loan guarantees are for larger investment projects that cover missing securities or supplement them in economically significant projects.