Digitization Funding in Germany: An Overview of the Funding Programs for Digitization
Published: July 25, 2024
Reading Time: 13 min
Contents
- Who is Eligible for Digitization Funding in Germany?
- Digitalization Funding: What is Funded with how much?
- Digitalization Funding – Nationwide Funding Programmes for Digitalization in Germany
- Further Digitization Subsidies for your Federal State
- Application for Digitization Funding: This is how the Application Process Works
- Digitize Business Processes & Benefit
Inhalt
- Who is Eligible for Digitization Funding in Germany?
- Digitalization Funding: What is Funded with how much?
- Digitalization Funding – Nationwide Funding Programmes for Digitalization in Germany
- Further Digitization Subsidies for your Federal State
- Application for Digitization Funding: This is how the Application Process Works
- Digitize Business Processes & Benefit
Funding for Digitalization in Germany: an Overview of the Funding Programmes for Digitalization
The digitalization of business processes brings numerous benefits, in particular time and cost savings, reduced susceptibility to errors and greater flexibility for employees. Many companies are therefore turning to digital solutions and investing in the optimization of their processes in order to remain competitive and efficient in the future.
However, adequate solutions are often associated with a high financial expense, which can be particularly challenging for smaller companies. This is why the Federal Ministry for Economic Affairs and Climate Protection has launched several funding programmes to support the digitalization of companies. In this article, we provide you with an overview of the most important information on digitization funding in Germany.
Who is Eligible for Digitization Funding in Germany?
As micro, small and medium-sized enterprises (SMEs) in particular find it difficult to drive forward the digital development of their company due to the usually not inconsiderable costs involved, most funding offers are aimed at them. The classification of a company into these categories is based on EU guidelines and largely determines the amount of funding available.
Companies that fall into one of these categories can generally apply for funding for digitization measures. For larger companies, there are selected funding programs and the possibility of loans.
The figures can vary depending on the federal state. The “Digitalisierungsprämie Plus” (Baden-Württemberg), for example, supports companies with up to 500 employees.
Digitalization Funding: What is Funded with how much?
Funding for digitalization can be applied for for a variety of projects. The introduction of new information and communication technologies (ICT) and the improvement of IT security are particularly eligible for funding. Exactly which projects are funded depends on the type of funding program. Funding is available for, among other things:
The grant amount varies depending on the type of funding and the federal state. For example, the Digitalization Premium Plus (loan variant) in Baden-Württemberg supports projects with a cost volume of between 5,000 and 100,000 euros.
Digitalization Funding – Nationwide Funding Programmes for Digitalization in Germany
In addition to state-specific funding programmes, the BMWK also offers nationwide funding to support your company with digitalization.
go-digital
The “go-digital” funding program of the Federal Ministry of Economics and Climate Protection (BMWK) is aimed at SMEs based in Germany with fewer than 100 employees and a maximum balance sheet total of EUR 20 million in the previous year. As part of the program, you can apply for funding for consulting services in the areas of digital business processes, digital market development, data competence and IT security. The consulting company you select must first be authorized by the Federal Ministry for Economic Affairs and Energy in order to ensure professional competence and security.
The funding amounts to 50% of the consultant’s fee at a maximum daily consultant rate of EUR 1,100 (excluding VAT) for a maximum period of 30 consultant days held within 6 months. The remaining 50% is borne by the company. The maximum funding amount is therefore 16,500 euros.
go-inno
The BMWK’s “go-inno”funding vouchers are used to promote external consulting services in German SMEs. Consultancy services in the areas of potential analysis and implementation concepts are covered. It is important that the technological relevance is clearly recognizable and that the projects have demonstrable added value for the company. As with go-digital, only consultations by authorized external consulting companies are eligible for funding.
SMEs in Germany can apply for funding if the company has fewer than 100 employees and had an annual turnover or annual balance sheet total of no more than EUR 20 million in the year prior to using the voucher. A company can claim a maximum of 5 subsidy vouchers per calendar year, with a maximum total value of EUR 20,000.
The subsidy vouchers cover up to 50% of the consultancy costs at a maximum daily rate of 1,100 euros. A consultant day lasts at least 8 hours, including preparation, follow-up and travel costs.
In the case of a consultation in the area of potential analysis, up to 8 consultant days are funded, with the possibility of 2 additional consultant days if expert third parties are involved. Up to 20 consultant days can be funded for the development of a realization concept. Here too, up to 5 additional consultant days can be claimed if expert third parties are involved.
BAFA “Promotion of business consulting for SMEs”
The BAFA (Federal Office of Economics and Export Control) funding program “Promotion of business consulting for SMEs” aims to promote entrepreneurial know-how in SMEs. German companies with up to 250 employees and an annual turnover of no more than 50 million euros are supported. As part of this program, the costs for professional consultations are partially covered.
In order to be eligible for this funding, certain requirements must be met, such as a prior company analysis to identify weaknesses or proof of qualification of the professional consultants involved.
Funding can be claimed not only for digitalization measures, but also for other business areas.
ERP digitization and innovation loan
With the ERP Digitization and Innovation Loan from KfW (Kreditanstalt für Wiederaufbau), German companies and freelancers receive support in financing projects in the areas of digitization and innovation. Funding is provided for projects such as the development and implementation of IT security concepts, the expansion of in-house broadband networks or the development and implementation of digital platform concepts. Projects such as trust structures, debt restructuring and follow-up financing are not eligible for funding.
The minimum loan amount is 25,000 euros and a maximum of 25 million euros can be applied for per innovation or digitalization project. For companies that are classified as innovative, KfW also offers loans of up to EUR 7.5 million per financing requirement. The loan covers up to 100% of the eligible investment costs and working capital for your project.
The minimum term of the loan is normally 2 years. The interest rate is calculated by your bank and depends on your financial circumstances and collateral. Application and repayment of the loan are handled by your bank.
European Regional Development Fund (ERDF)
The European Union has set up the European Regional Development Fund (ERDF) to balance out regional imbalances. The fund is endowed with around 226 billion euros for the period 2021-2027. Its objectives are to strengthen the labor market and the regional economy as well as to promote European territorial cooperation.
One of the official political objectives of the ERDF is innovative and intelligent economic change in Europe. In order to achieve this goal, all member states must use a fixed percentage of their ERDF allocation for this purpose. This is calculated on the basis of the GDP per capita of the respective country.
The funds thus made available are used for projects such as
- applied research and innovation
- investments in SMEs
- equipment, software and intangible assets
- technical assistance
Funding programs for economic development have been launched in many member states as part of the ERDF – including Germany. Some of the following grants were derived from the ERDF and support you in promoting digitalization in your company.
Further Digitization Subsidies for your Federal State
Please note that there are certain requirements that you or your company must meet for most of these grants. You can obtain all the necessary information from your responsible federal ministry.
Application for Digitization Funding: This is how the Application Process Works
In order to receive digitization funding for your company, you must submit an application to the selected project management organization before the digitization project begins. We recommend submitting this as early as possible, as waiting times vary greatly due to the high number of funding applications and can even take several months. When submitting your application, please bear in mind that the company must be based in the relevant federal state and that the funding must be implemented there.
- 1
Application for Funding for Digitization
Complete the application form for the selected funding and submit it to your responsible district government. Which district government is responsible for your project depends on where the funding measure is being implemented.
- 2
Confirmation of Receipt of your Application
As soon as you have received confirmation of receipt of your application for digitization funding, you can start your project. Please note, however, that you are acting at your own risk.
- 3
Examination of your Application
Your application will be reviewed by the responsible district government. You may have to submit any missing documents.
- 4
Funding Notification
Depending on whether your application has been accepted or rejected, you will receive a positive or a rejection notice.
- 5
Proof of Use of the Funding
As soon as the digitization project has been completed, you must submit proof of the use of the funding to your district government. Proof of use and the results of the project will be checked.
- 6
Payment of the Funding Amount
The funding amount is paid out as soon as the review has been completed (cost reimbursement principle).
