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Financial difficulties - Germany

Updated 12/2010

The well-being or otherwise of any business is dependent on how it deals with the issue of ‘financing’. This primarily involves coherent financial planning: the selection of the right types of financing to secure liquidity and for investments, and the right strategic approach to dealings with banks.

Financial planning puts a company on a firm footing.

The objective is

  • to plan and finance investments;
  • to safeguard the liquidity of the company;
  • to make the company profitable.

Safeguarding solvency is the be-all and end-all of crisis-proof company management and financial planning. In spite of this, some companies experience liquidity problems because:

  • customers do not pay their bills;
  • unexpected expenditure has an impact;
  • there is no overview of upcoming revenue and expenditure.

Businesses that encounter difficulties in financing working capital or investments should:

  • determine what their company’s financial situation is;
  • identify the reasons for the difficulties;
  • establish what options there are for addressing these difficulties.

Access to different sources of finance can help overcome financial difficulties.

When filing for bankruptcy is the only option left for a business owner, it pays to cut your losses, initiate proceedings sooner rather than later, and move on to a new project.

Check also the legislation on this topic in:

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Enterprise Europe Network - Contact points

The Enterprise Europe Network provides businesses with information and advice through its local contact points. 

Choose your nearest contact point for personalized help and advice:

Further help

1. The most important point of contact for any entrepreneur experiencing financial difficulties, even before they meet with their bank, is the Chamber of Industry and Commerce or Chamber of Handicrafts that is responsible for their place of business or the professional association specific to their field. These chambers can offer a wealth of information and advice to assist you in good time and provide publicly-financed aid instruments where appropriate.

These mainly include:

The ‘Runder Tisch’ [Round Table] can be reached via the responsible Chamber of Industry and Commerce or Chamber of Handicrafts. There, the competent employee engages a management consultant audited by the Credit Institute for Reconstruction (KfW) to put the company ‘under the microscope’ for a maximum of ten days, to draw up an analysis of weak points and to identify possibilities for reorganisation. The costs for this are borne by the KfW Mittelstandsbank. The company itself just has to cover the travel expenses. Then all those involved meet at the ‘Round Table’. These include a representative of the company’s bank, the main creditors, the management consultant and, of course, the entrepreneur. They agree the action to be taken based on the data collected and, first and foremost, ascertain the willingness of those involved to reorganise the company.

The KfW also offers ‘turn around consulting’. If a 'Round Table' finds that there are positive prospects for the future, a coach should help the company to implement the measures that were decided upon.

2. The support and finance consultancy service of the Federal Ministry of Economics and Technology.