In the latest edition of Business Planet, we visit Frankfurt to find out how you can obtain financing as this is obviously the question being asked each day by millions of businesses throughout Europe. Well one solution is to get help from a European programme like COSME.
Point of view
We guarantee 80% of the default risks, and thus enable new ventures to start operating
Klaus Müller, the representative of the financial intermediary of COSME in Germany says:“The KfW finances the creation of businesses here in Germany. We don’t do this directly but through local banks. With COSME’s Loan Guarantee Facility, we guarantee 80% of the default risks, and thus enable new ventures to start operating.”
Torge Brummund, Co-founder of KopfNuss GmbH in Hamburg adds: “We developed a drink in collaboration with the University of Kiel. The money from the KfW greatly helped us to launch the product onto the market, create our company and the prototype and production of the ﬁrst 40,000 bottles.”
A totally natural refreshing drink, without any added sugars and alcohol free. This very trendy product was introduced to the market just over a year ago by three young entrepreneurs.
To get started, they obtained a loan of 30,000 euros from a bank in Hamburg. A loan which was guaranteed by KfW through the COSME programme, and which really allowed this new venture to get off the ground.
After one year, production has increased ﬁve times over. They have formed partnerships with events organisers and their points of sale are continuously increasing.
Dennis Redepenning, also co-founder at KopfNuss GmbH explains: “We are in the process of launching a second product on to the market, and we are getting a European biolabel for both our products. We are continuing to expand. Our aim is to be in Berlin and Munich next year.”
The Equity Facility for Growth
Now back here in Frankfurt with Klaus Müller. Klaus, what other ﬁnancial tools are available to help entrepreneurs.?
“Along with the Loan Guarantee Facility, COSME has another tool – The Equity Facility for Growth, which doesn’t exist in Germany, but which favours investment in risk capital.”
The aim of COSME is to improve the competitiveness of SMEs in Europe. We estimate that, through this lever effect, the programme will be able to unblock some 25 billion euros for European SMEs between 2014 and 2020.
“So Klaus, if I were an entrepreneur and I, too, wanted to use and take advantage of these European ﬁnancial tools. How does it work?”
“In Germany it’s very easy for creators of enterprises to use COSME. You go straight to the bank of your choice and ask for money. In other European countries, you have to do an Internet search to ﬁnd which banks collaborate with COSME.”