Bürgschaftsbanken nach Bundesländern.
Apart from big companies, there are predominantly small and medium-sized companies (SME) with no access to the capital market in Germany. For them funding is a rather difficult matter. This was also true 60 years ago. Many companies lacked the necessary guarantees, which is why it was difficult for them to obtain loans. For this purpose, the “credit guarantee associations” were founded in 1950 for the individual sectors such as trades, commerce and industry. Following mergers, they resulted in cross-sector guarantee banks in the states. They support small and medium-sized companies with guarantees for loans by the principal bank if there is no security.
During the crisis from 2008 to 2010, guarantees were especially in demand. These enabled small and medium-sized companies to obtain secure funds. In 2012, demand had already reached the same level as before the crisis: more than 7,000 small and medium-sized companies were funded with guarantees amounting to almost 1.1 billion euros. In this way, companies could take out loans and equity for 1.6 billion euros and thus make investments to the amount of approximately five billion euros.
Especially the small and medium-sized companies are highly leveraged. Often they don’t have enough equity. Even if some small and medium-sized companies made headlines with the issue of their own bonds in the past years, the majority of German companies cannot raise funds through the capital market because they are too small. For this reason, at the end of the 1960s, the German government wanted to provide companies with equity via private equity investment companies with state aid. This is how the Mittelständische Beteiligungsgesellschaften (MBGen) emerged, which offer SMEs equity. As business promotion institutes, they cooperate closely with the guarantee banks. Approximately 20 years after the founding of the guarantee banks, the promotion of SMEs was thus supplemented by the MBGen.
In the forty years of their existence, the MBGen have developed into financiers. On the one hand their equity capital only makes up five per cent of the volume, but on the other hand they account for half of all investments granted in Germany. In 2012, they approved 591 investments amounting to 182 million euros. Today, MBGen are involved in about 3,300 companies across all sectors with investments of more than 1.2 billion euros.
Bürgschafts- und Garantievolumen 2012 in Mio. EUR.
Geschäftsvolumen 1.090 Mio EUR. Anzahl 7.061.
Guarantee banks and MBGen expect a similar high level of demand for 2013 and the coming years. However, if the economy does not strongly pick up, we expect increased enquiries, especially with the guarantee banks. The regulation of the financial market also threatens to complicate the funding of SMEs, because, in view of higher capital requirements for banks and companies, guarantees will play an even more important role in future lendings. The programmes of the guarantee banks and the MBGen mitigate negative consequences of Basel III for SMEs.
The shareholders of guarantee banks and MBGen are chambers of industry and commerce, chambers of handicrafts, economic associations, banks, savings banks and insurance companies. For these promotional institutions created “from businesses for businesses” to be able to support SMEs in the future, continued development is necessary – also with a view to regulations. In light of federal elections coming up in September 2013, the guarantee banks and MBGen have submitted their demands to the politicians. However, these socio-economic instruments have to develop further, irrespective of any elections. Guarantee banks and MBGen should be taken into consideration for all SME-related measures by the federal and state governments. Neither this nor any future government should allow limitations to the current promotion possibilities, for instance in the field of financing working capital. Rather, the instrument of guarantee banks and MBGen should be strengthened and intensified.
The guarantee instrument works with counter-guarantees from the federal government and the states, which is why authorities constantly scrutinise guarantee banks. Guarantee banks do not fear this scrutiny because they are a verifiably well-functioning instrument that has a clean slate as far as regulatory aspects are concerned, has the biggest leverage of all aids and goes easy on public budgets. To be able to improve the promotional possibilities even further, an extension of the programme to micro financings and financings for non-profit organisations in the social field, such as day care centres and nursing institutions, would promote companies whose importance will be increasing in the future in times of demographic change.
Genehmigte Beteiligungen der MBGen 2012 in TEUR.
Gesamtvolumen 182.310 TEUR. Anzahl 591.
In addition, in the event of an economic slump, guarantee banks have to be able to expand their product range rapidly and unbureaucratically. As with the last economic crisis, when they provided guarantees worth up to two million euros. If state-specific limitations and guarantee criteria that have nothing to do with the business of lending were to be waived, this would also debureaucratise and expedite the guarantee process. SMEs would directly benefit from this.
They would also benefit from a higher level of guarantees. The current ceiling stands at 1.25 million euros, which is adjusted only every five years. The counter-guarantees and counter-guarantee conditions have to be renegotiated regularly with the federal government and the states at these intervals. Although the ceiling was raised by 25 per cent at the beginning of the year 2013, this was merely an adjustment to rising prices. Therefore it should be possible to continuously adjust the ceiling so that guarantee banks in their function as business promotion institutions can better react to current economic developments and support SMEs in accordance with their needs.
One focus of the work of guarantee banks and MBGen lies in the promotion of business start-ups and business successions. However, here in particular, there is a lack of capital and securities. For these ventures, guarantees are often the only way to provide securities and thus obtain funds. Accordingly, in the year 2012, start-ups and takeovers accounted for 40 per cent of our promotions. These groups strengthen Germany’s innovative capability and continue to advance structural change. Therefore, we also demand an increase of counter-guarantees and for business founders and successors and for innovation projects and the creative industry by 10 percentage points and an improvement of their funding options.
New promotion programmes are less meaningful than the expansion of existing offers. Duplicate promotions should be avoided. This is why the federal government and the states have to review the promotion instruments and offers with a view to parallel offers and competing product developments.
As business promotion institutes, guarantee banks and MGBen are ready to ensure the financing of SMEs in the future as well. We are confident that the next federal government will also have the promotion of business and SMEs in mind.
The author earned a doctorate in business administration. After a management position at the Hamburger Sparkasse, he became managing director of the Bürgschaftsgemeinschaft Hamburg GmbH and BTG Beteiligungsgesellschaft Hamburg mbH from 1994 to 2013. Dr. Papirow has represented the Verband Deutscher Bürgschaftsbanken e.V. (VDB) as deputy chairman since 2007 and as chairman since 2011.
