Since the past week, Commerzbank has received “a high four-digit number” of financing requests from corporate and entrepreneurial customers in the course of the corona crisis, explains Haibt. A good third of them meet the requirements of the state development bank KfW, which assumes a large part of the credit risk as part of aid programs.
If it is particularly urgent, Commerzbank makes advance payments and pays companies loans within a day. “This is possible because we as the house bank have known the companies and their business models for years.”
The Deutsche Bank, the largest German money house, also registers enormous interest. Already on Monday she had received more than 5,000 inquiries about corona. A bank spokesman said approximately 2,000 customers had made specific requests for KfW’s emergency loans. The first promotional loans have already been approved.
The big rush is also coming to KfW. The state bank itself said that it had received a total of 34 applications with a loan volume of almost two billion euros by Tuesday 12 noon. The lion’s share is accounted for by four large applications with a total volume of EUR 1.985 billion. A spokesman said that 30 applications were loan amounts of up to three million euros. The volume of these applications amounts to 17 million euros.
KfW special loans are intended to dampen the consequences of the corona crisis. Companies have been able to apply for these funds since Monday, and the first emergency loans were granted on Monday. They are part of the rescue package to combat the corona crisis that the federal government has just decided on. In total, it comprises the gigantic sum of 1.2 trillion euros.
This is the corona protective shield for the German economy
The KfW’s new loans are intended for companies that are temporarily experiencing financial difficulties due to the rapid spread of the corona virus and need liquidity to bridge the gap. Working capital and investments can be financed with the loans, which are guaranteed up to 90 percent by the state. KfW normally only promotes investments with its programs and shares the credit risk with the house bank in half. The funds are often discounted. In parallel, there are bridging or liquidity loans from the development banks of the individual federal states.
Full order books
In some cases, corporate customers had already tried to get KfW loans last week. “We already had a full ‘order book’ from the previous week, which will now be given to KfW as soon as possible,” says Stephan Ortolf, head of corporate banking at the top cooperative institute DZ Bank.
Numerous money houses report enormous demand. This also applies to private banks like Hypo-Vereinsbank, HSBC and BNP Paribas and for the German savings banks, which are market leaders in business with medium-sized companies. At Hamburger Sparkasse, for example, one of the largest of the 380 savings banks, several hundred inquiries for immediate funds and promotional loans were received on Monday alone. Other large savings banks report similar figures.
According to the German Savings Banks and Giro Association (DSGV) – similar to Commerzbank ¬, public-law credit institutions have partly made advance payments and paid out promotional loans, although the funds are only made available to KfW later. Deutsche Bank also offers customers bridging financing for loan amounts of up to three million euros, for which KfW leaves the risk assessment of customers to the house banks alone, even before the loans are officially available in April.
Not only is there a great demand for aid loans, there is also a great need for information about Corona. Deutsche Bank has set up a Corona Helpdesk that answers questions from customer advisors across the board – from questions about new bankruptcy law, short-time work benefits to emergency loans. The DSGV also registered “a very high volume of information requests and advice needs of affected companies” immediately after the start of the new funding programs.
Banks praise the form of aid: “The KfW programs are very flexible. They are strongly oriented towards the 2008 programs, but are being handled even more pragmatically, ”says Andreas Voglis, co-head of corporate customers at the HSBC money house in Düsseldorf, with a view to government aid during the financial crisis a good ten years ago.
How quickly companies get a KfW loan also depends on the size of the desired loan. With sums between three and ten million euros, the development bank checks faster than usual. According to financial circles, KfW endeavors to process a maximum of five working days.
In order to be able to help quickly, Commerzbank has set up an internal special fund with a volume of EUR 700 million in addition to the KfW programs. “We use this liquidity to pay out loans directly when necessary,” reports Jan Rolin, who is responsible for larger companies as the divisional board member.
There is a need for this. “There were already a handful of companies where the situation was so serious that we decided within a day and paid the loans immediately,” says Rolin. Most inquiries come from small companies and medium-sized companies with a turnover of between 15 and 500 million euros. Large corporations, on the other hand, have not yet applied for KfW loans.
Difficult considerations for banks
Observers are confident. Markus Berg, partner in the consultancy Berg Lund & Company and expert for regional banks, said: “The Sparkassen-Finanzgruppe and the cooperative financial group are very determined. As far as I can see, everyone in the two groups is pulling together – and at high speed. ”
Nevertheless, according to Berg, the money houses are sometimes faced with difficult considerations, even if they only take ten or 20 percent of the risk with the new KfW loans. “There are business models where it was questionable whether they were sustainable even before the crisis,” he says. “In such cases, the banks will usually choose not to finance it with KfW loans. Only grants can help the companies here. “
Commerzbank also makes this clear: “Of course, as a bank we have to carry out an individual risk assessment for financing inquiries and decide whether a business model is sustainable,” says corporate client manager Haibt. “We continue to have this responsibility as a bank.”
In addition, there are still unanswered questions about the cases in which KfW aid is effective. This applies, for example, to companies that have chosen leasing as a financing alternative. Kai Ostermann, head of the market leader Deutsche Leasing, said: It is currently not clear whether and how this will be taken into account in KfW’s aid programs. He demands “to open all programs and measures for leasing”. Deutsche Leasing belongs to the savings banks.
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