Guarantee Bank and Loan Guarantees – How Do You Obtain Them?

 

What is a Bürgschaftsbank?

A Bürgschaftsbank is a public, non-profit institution (but not a traditional bank). Its purpose: to support small and medium-sized enterprises (SMEs) and self-employed individuals by providing loan guarantees to banks. If you lack sufficient collateral (such as property or large capital), the Bürgschaftsbank guarantees part of the loan to the bank on your behalf.

Who is eligible?

• Sole proprietors → Yes

• UG or GmbH → Yes

• Freelancers → Yes

• Start-ups → Yes

• General business owners → Yes

Which loans can be covered?

• Start-up loans

• Expansion or modernization financing

• Purchase of equipment, tools, company vehicles

• Working capital financing

• Sometimes: acquisition of existing businesses

How much guarantee is provided?

• Usually up to 80% of the loan amount

• Maximum guarantee varies by federal state (mostly up to €1.25 million)

• The loan itself is granted by your bank (e.g., Sparkasse, Volksbank).

Steps to obtain a Bürgschaft:

1. Define your needs (amount, purpose, bank agreement).

2. Choose a partner bank (Hausbank).

3. Submit application:

   • Via the bank directly

   • Or via “Bürgschaft ohne Bank” (BoB).

4. Required documents: business plan, financial plan, CV, business registration/trade register, preliminary bank approval.

5. Processing time: 2–4 weeks.

Costs:

• One-time fee: 1–1.5% of the guarantee amount

• Annual fee: approx. 1%

Advantages:

• Access to financing without large collateral

• Improved negotiation position with banks

• Strong support from an official institution

Notes:

• A Bürgschaft is not a free loan, but a financing tool.

• Each German federal state has its own Bürgschaftsbank.

• Some states cooperate with KfW Bank.