A few years ago, no one could have foreseen that Abed Al Naser Abded Al Latif would one day be a successful entrepreneur. He came to Berlin from Syria as a refugee and was dependent on social benefits. But the qualified civil engineer dared to take the step into self-employment and founded a drywall construction company, he hired other refugees.
The company survived the corona crisis, now it should take off. This is only possible with a loan. The entrepreneur received it thanks to a new funding program, whose patron is Economics Senator Stephan Schwarz (non-party, for SPD). It aims to help companies that are struggling to get financing from the bank.
On Tuesday, Schwarz presented the program to the Bürgschaftsbank Berlin (BBB). It consists of two parts: “BBB Welcome” is aimed at people from non-EU countries. These can be refugees or other migrants who want to start a business in Berlin.
The second part of the program is called “BBB Social” and is intended to promote social enterprises. These are companies that want to make a positive contribution to society. One of them is Graefewirtschaft GmbH, a catering service for schools and day care centers. Annette Jankowski founded the company in 2016 together with her business partner Heike Birkholzer.
“We wanted to get migrants into work,” says the managing director. At first, the two women opened a restaurant with their own money. There they employed refugees who cooked dishes from their homeland.
But there are many restaurants in the capital. The founders recognized a much greater need elsewhere: Many schools and day-care centers want to offer high-quality food made from ecologically produced ingredients. The Graefewirtschaft made a change, set up a canteen kitchen and several production kitchens in schools. According to the company, it now puts 3,500 meals on the table every day.
Guarantees pave the way for loans
“The profits are invested in new jobs,” explains Jankowski. The demand is higher than the supply. “Now we are in a phase of expansion.” But in order to get a loan, the Graefewirtschaft needed a guarantee. The BBB helped there. Senator Schwarz emphasizes: “Financing is often difficult for social enterprises that are not geared towards maximizing profits. The Senate wants to address this bottleneck.”
Guarantee banks are special banks that do not offer their own loans. Instead, they assume default guarantees and guarantees for investment loans from other financial institutions. They secure the loans for up to 80 percent of the loan amount. This makes it easier to get the bank’s approval. The maximum amount is 1.25 million euros.
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Companies can use the loan to procure new machines or vehicles, for example. Others use it to finance modernization or expansion. The BBB receives a commission of 1.75 percent per year and a one-time processing fee.
According to a KfW study, nine out of 100 start-ups in Germany are social enterprises like the Graefewirtschaft. The “Social Economy Berlin” network supports companies that want to leave a positive footprint. The project manager, Afra Gloria Müller, sees the new funding program “BBB Social” as an important help for her work: “The program supports social enterprises that ensure the further development of the city.” She hopes that it will serve as a role model so that other federal states follow suit and set up similar programs .
Social enterprises have a long tradition
The social economy may be a trend. However, the basic idea is by no means new. In the early 19th century, British textile manufacturer Robert Owen introduced more humane working conditions at his factory in New Lanark, Scotland.
At the time, that meant working 10.5 instead of 14 hours, pension insurance and reduced-price housing. In Germany, social reformers such as Friedrich Wilhelm Raiffeisen or Hermann Schulze-Delitzsch founded the cooperative movement in the mid-19th century. Farmers, craftsmen and small entrepreneurs initially supported each other with purchasing groups, later also with loans and pension schemes.
Berlin’s Senator for Economic Affairs, Stephan Schwarz, is the patron of the new support program. Photo: Doris Spiekermann-Klaas
BBB Managing Director Peter Straub recalled on Tuesday that the Bürgschaftsbank Berlin also has a similar tradition: “We emerged from the self-help of Berlin’s economy to give companies security.” Guarantee banks were founded after the Second World War. At that time, most people who wanted to found a company had neither cash nor other assets as collateral for loans.
The Economics Senator is convinced that the whole of Berlin will benefit from the funding programmes: there is enormous potential in the city’s diversity – including economic potential, he says. This is currently underused. “Berlin is the capital of ideas.” The promotion of business start-ups is a good way to make the potential usable. “I’m sure that we will do pioneering work together with the Bürgerschaftsbank.”
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