March 24, 2020 / 11:59 AM / 15 days ago

German companies rush to banks for emergency coronavirus funds

FRANKFURT (Reuters) - German companies are rushing to take advantage of a state-backed program for emergency financing as they deal with the fallout from the coronavirus outbreak, bankers said on Tuesday.

KfW, founded to finance the nation’s rebuilding after World War II, on Monday began accepting applications for the loans from the nation’s banks and their business customers.

The effort is key to keeping Europe’s largest economy at least partially moving along as business grinds to a halt to limit the spread of the virus.

Deutsche Bank (DBKGn.DE) received more than 5,300 queries from customers on Monday, 300 of which were concrete credit applications, a spokesman said on Tuesday. The first loans have already been approved and will probably be paid out this week, he said.

Commerzbank (CBKG.DE) said nearly a third of the thousands of inquiries it has received fulfilled the criteria of the KfW program.

The companies are mainly small and medium-sized companies that make up the backbone of the German economy.

Germany is guaranteeing up to 90% of the loans for small companies with fewer than 250 employees, and up to 80% for larger companies. The firms’ home bank, or Hausbank, are on the hook for the rest of the risk.

Reporting by Hans Seidenstuecker and Patricia Uhlig; Writing by Tom Sims; editing by Scot W. Stevenson, Kirsten Donovan

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