Financing growth, investment and innovation projects

In practice, companies are conventionally financed primarily by equity, debt and mezzanine. In addition, however, subsidies, forexample, represent a smart extension of the financing foundation. On this page you will find further topics from the context of financing, such as venture capital or private equity / venture capital, alternative forms of financing (financial technology, financing platforms, crowdsourcing) as well as information about the business plan.

Equity capital

Equity capital refers to all the funds that the owner of a company raises himself to finance its operations. Alternatively, it also refers to profits that are left in the company for the purpose of self-financing. Equity is one of the most common forms of financing growth, investment and innovation projects.

Borrowed capital

Debt capital refers to all capital provided by an outside legal entity. It thus represents the diametrically opposed term to equity. One form of debt is loans, which are among the most conventional forms of corporate financing. One of the reasons for this is that intelligent promotional loans offer important advantages, such as repayment-free interest or favourable interest rates. Often pending projects such as innovation projects, which also involve a not inconsiderable financial burden, are therefore financed with borrowed capital.

Venture capital or private equity/venture capital

Venture capital is a special subtype of private equity. The latter term generally refers to the direct involvement of an investor in a company in the form of equity. This form of financing comprises various types of equity financing. Venture capital is the amount of capital invested in a newly created company, which is often associated with increased risk. Accordingly, venture capital is used in particular in the initial phases of a company or in growth phases. However, it is generally a suitable financial option in all risky situations, including the realisation and financing of a high-risk innovation project. The investor’s increased risk in venture capital is offset by the sale of parts of the company or by higher interest rates.

Possible forms of venture capital:

• Equity: In this case, the investor receives shares in the company. He buys these from the previous owners who receive the purchase price. In addition, the investor pays a premium. The premium represents an amount of money provided by the investor in excess of the purchase price. It’s not going to the salesman. The premium is paid into the capital reserve of the company.

• Mezzanine: Mixed form between equity and debt capital. The money is given in the form of a loan, whereby the interest rate can also depend on the success of the company. In contrast to usual loans, however, a subordination has been agreed. This means that the loan is treated as equity in the event of liability.

• Mixed forms between mezzanine, equity and debt capital: This possibility is sometimes also chosen by investors, sometimes with the option of transforming one into the other.

Financial Consulting / Banking Communication

Our funding experts will advise you on the available highly subsidised funding programmes of KfW and the Federal States for your financing project.

No matter whether you are founding, growing or acquiring a company (business succession) – we accompany you and even prepare the applications for your house bank.

In particular, we negotiate with the banks at eye level and, if desired, establish contacts with capital providers (factoring companies, credit institutions, leasing companies, equity providers, etc.) within our network. With our comprehensive advice and accompaniment to your bank appointments, we work together with your house bank to individually find a well-balanced financing concept. Since we have experienced bankers in our team, we also know the things that are important to the bank.

We design your project within the framework of promotional and financing consultancy with highly subsidised KfW and Federal State funds, so that your project can be put into practice.

In addition, within the framework of innovation consulting we also support the promotion of technology, such as a ZIM application or the SME instrument in Horizon 2020.

GRW investment grants (Community task, ERDF-based)

One focus of funding here is on companies’ investments in property, plant and equipment. In order to facilitate investments in tangible fixed assets, companies can apply for grants for investments. This grant funding is especially possible in structurally and economically weak areas in Germany. Grants of this kind are known in particular as GRW funding (joint task). The joint task “Improvement of the regional economic structure” (GRW) promotes existing enterprises, but also business start-ups in the commercial sector. The funds are mainly awarded as subsidies for investments, but in some federal states also as wage subsidies. In particular, SMEs (small and medium-sized enterprises), but also large enterprises, will be supported.

The main focus of the funding bodies is on creating and safeguarding jobs. Grants are partly provided from GRW funds and from funds of the individual federal states. In some federal states it is also possible to apply for ERDF grants.

We prepare your grant application largely on a success-based basis. Use this building block (up to 30% investment grant in certain areas, depending on the size of the company) for your investments. Subsidies act like equity capital and can improve the economic equity capital, the rating and thus your creditworthiness as well as facilitate the provision of credit by your house bank. The grants thus improve the financial structure and profitability of a project and ensure that projects can be realised in the first place.

Repayment subsidies

In addition, it is also possible to receive repayment subsidies directly from KfW (the reconstruction loan corporation). For you, this means that your loans taken out do not have to be fully repaid. On submission of the relevant document and in compliance with the conditions, KfW grants a subsidy. This is not disbursed directly, but reduces the remaining amount of the KfW loan still outstanding.

Grants from funding programmes

Grants are another way of financing innovation projects. Such a form of technology support can be obtained within the framework of dedicated support programmes, which are available in large numbers and can be selected to suit the project. The Central Innovation Programme for SMEs (ZIM), for example, promotes technological innovation projects on an open-topic basis. In addition, the following funding programmes are also available for financing innovation projects:

• Horizon 2020 SME instrument SME
• go-Innovative (go-Inno)
• WIPANO patent promotion
• KMU-innovative
• Modernity Fund (mFUND)
• GRW grant
• KfW loan with repayment subsidy

You have not found the right funding programme yet? Here you can find out more about the EU-programme Horizon 2020 SME.

Alternative forms of financing

Especially in recent years, alternative forms of financing have become increasingly differentiated and popular. Here, too, the aim is to finance innovations without overburdening your own cash flow. Among other things, these financing options are among the alternative forms of financing for innovation projects:

• Financial technology (Fintech / FinTech)
• Financing platforms
• Crowdsourcing

Business plan

A business plan is a document that describes the measures required to successfully seize a business opportunity. It includes, among other things, targeted marketing strategies and a financial plan. The latter consists of an estimate of the various costs (e.g. financial and personnel costs) and expected sales. In addition, the business plan includes profitability and liquidity planning as well as sales planning and risk analysis. In this way, the business plan realistically assesses the economic viability of the planned investment expenditure, such as a technological innovation project. A business plan often needs to be presented to various investors such as banks and venture capitalists in order to win them over to release their funds. The business plan thus represents a further option for financing your innovation project.

We work vendor-neutral and are only committed to our customers

Many financing providers pay a commission to the intermediary. We pass on commissions to the customer if they cannot be directly converted into an advantage for the customer. Our opinion is that a commission from a financier endangers our neutrality. We seek the best possible solution for our clients. We do not let FinTech or other service providers use us as an extended sales arm.

It is our interest to achieve the maximum for our clients. We work on basis of fixed and success fees that our clients pay. This has the certainty that your interest is the first priority.

Financing your investment

You are planning an investment, but do not know how to finance it? Get in touch with us  – we will be happy to advise you on the financing options available in the areas of growth, investment and innovation.