Small and Medium-Sized Companies in Germany Struggle to Obtain Loans, Large Companies Fare Better

Small and medium-sized companies in Germany are finding it increasingly difficult to obtain loans. 31.7 percent of those surveyed rated their banks’ behavior in loan negotiations as restrictive. This was the result of the survey on the KfW-Ifo credit hurdle for the third quarter of this year. “This means that the previous high since the survey methodology was revised in 2017 of 31.3 percent from the fourth quarter of 2022 was slightly exceeded,” says KfW.

Large companies can get loans more easily

Compared to the previous quarter, the number of small and medium-sized companies with difficulties in obtaining loans rose by almost a quarter. Large companies fared somewhat better. The credit hurdle for this size class rose by 19 percent to 21.3 percent.

“Companies’ difficulties in loan negotiations are growing,” says KfW chief economist Fritzi Köhler-Geib. “This is probably due, on the one hand, to the ongoing rise in interest rates. On average, more than five percent of corporate loans were recently due. (…) On the other hand, a further tightening of lending policy is plausible due to the worsening economic mood and an associated reassessment of the risks by the banks.”