How do German SMEs finance themselves?

Many compa­nies in the German SME sector still prefer tradi­tio­nal loan finan­cing. This has not really chan­ged. After years of a good econo­mic phase, the deve­lo­p­ment of the indi­vi­dual compa­nies has been quite varied. While one group is more on the inves­tor side than the loan demand side due to a posi­tive deve­lo­p­ment and is thus less depen­dent on debt finan­cing, the other group of compa­nies went through a mixed econo­mic phase with subdued earnings figu­res and is looking for both equity and debt capi­tal. A criti­cal self-assess­ment of one’s own earning power and poten­tial is ther­e­fore important in order to iden­tify the most suita­ble form of finan­cing or the most suita­ble finan­cing part­ner for one’s company and to make opti­mal use of the oppor­tu­ni­ties that present themselves.

Due to the ongo­ing low inte­rest rate policy and the loose mone­tary policy of the ECB as well as the posi­tive econo­mic data, banks are defi­ni­tely looking for feasi­ble lending busi­ness. Howe­ver, the bifur­ca­tion of the market and stric­ter regu­la­ti­ons make it more diffi­cult to find good busi­ness oppor­tu­ni­ties. On the one hand, there are the compa­nies that are looking for credit finan­cing but are rarely able to meet the banks’ requi­re­ments, and on the other hand, there are the compa­nies that can demons­trate a good to very good credit rating. A fierce battle is raging between the banks for the latter compa­nies in parti­cu­lar. In addi­tion, despite favorable condi­ti­ons, demand for loans can be clas­si­fied as rela­tively subdued. In the mean­time, a wide range of condi­ti­ons is offe­red, which focu­ses on the indi­vi­dual situa­tion of the company and the risk rating by the respec­tive bank.

The deve­lo­p­ment is still in its early stages. Crowd finan­cing offers an alter­na­tive to tradi­tio­nal finan­cing opti­ons, but is clearly in a niche market. But it would be short-sigh­ted for the estab­lished market parti­ci­pants to believe that the cup would pass them by. Due to advan­cing digi­ta­liza­tion and the possi­bi­li­ties of the Inter­net, new inno­va­tive solu­ti­ons and alter­na­ti­ves to tradi­tio­nal forms of finan­cing will also emerge in this area. It is to be hoped that the new possi­bi­li­ties will not be put a stop to too early and in the long term by legal regu­la­ti­ons and ordi­nan­ces. Howe­ver, many compa­nies still attach a subor­di­nate role to crowd­fun­ding and prefer finan­cing through tradi­tio­nal chan­nels, which may be due to the criti­cal atti­tude of SMEs to disc­lose company data. In the seed and start-up scene, on the other hand, the topic has become indis­pensable, and those who have alre­ady had posi­tive expe­ri­en­ces with crowd finan­cing in the early phase of their company will possi­bly conti­nue to do so in the future.