Digitization in small and medium-sized enterprises (SMEs) is becoming increasingly important in order to keep pace with digital trends and thus increase productivity and ultimately competitiveness in the market. Various studies show that the share of digitization activities in SMEs has increased over the past year. In this context, companies invest most frequently in digitizing contact with customers and suppliers, renewing IT infrastructure and building up necessary know-how.
At the same time, however, it is also apparent that there are still many companies that have reduced their digitization activities or have not yet invested in digitization at all. One of the key reasons for this is the lack of monetary resources to finance digitization projects. There are various investment incentives for digital transformation in SMEs in the form of funding from the federal and state governments. In today's blog, we present three funding programs - "go-digital" and "Digital Jetzt" at the federal level and "E-Business" using Saxony as an example at the state level.
Funding program "go-digital"
With its three modules "Digitalized Business Processes," "Digital Market Development" and "IT Security," the "go-digital" funding program is of particular interest to small and medium-sized commercial enterprises and the skilled trades. In addition to the consulting services themselves, the application, accounting and verification of use of funds are also carried out by authorized consulting companies in order to provide additional relief for the companies.
What are the requirements for funding?
- Companies in the commercial sector, including the skilled trades, with technological potential
- employment of less than 100 employees
- Annual sales or an annual balance sheet total for the previous year of no more than €20 million
- Permanent establishment or branch office in Germany
- Eligibility for funding under the de minimis regulation
How high is the grant?
- Funding rate of 50 percent on a maximum daily consultant rate of € 1,100
- Maximum funding of 30 days in a period of six months
Funding program "Digital Jetzt" ("digital now")
With the funding program "Digital Now - Investment Support for SMEs", SMEs receive financial grants and are supported with investments in digital technologies as well as digital know-how. The funding program comprises two modules - funding module 1: "Investment in digital technologies" and funding module 2: "Investment in employee qualification". Funding can be requested for one of the modules or for both modules.
What are the requirements for funding?
- Presentation of a digitization plan by answering specific questions in the funding application.
- Permanent establishment or branch in Germany where the investment is to be made
- The project must not have started at the time the funding is approved
- After approval, it must generally be implemented within twelve months
- The company must be able to provide evidence of how the subsidies were used
- Application for funding up to and including December 31, 2023
How high is the grant?
- Per company max. € 50,000, for investments of value chains and/or networks up to € 100,000
- Subsidy is calculated on a pro-rata basis of the company's investment costs
- Subsidy rate* (in % of investment costs) is graduated according to company size
--> Up to 50 employees: up to 40%.
--> Up to 250 employees: up to 35 %.
--> Up to 499 employees: up to 30 %.
* If the application is received by June 30, 2021, +10 % each to limit the economic impact of the Corona pandemic.
Funding program for the digitization of business processes (e-business)
The e-business support program is aimed at small and medium-sized enterprises in the Free State of Saxony for the preparation and implementation of a digitization project, the procurement of software and hardware, and the transfer of digital know-how. Funding is provided for the introduction and further development of modern information and communications technologies to open up new sales opportunities, optimize internal processes and digitally map business processes with customers and suppliers.
What are the requirements for funding?
- Small and medium-sized enterprises with their registered office or a place of business to be benefited in the Free State of Saxony.
- Small companies: Employment of less than 50 employees and annual sales or annual balance sheet total of no more than €10 million.
- Medium-sized companies: Employment of less than 250 employees and annual sales or annual balance sheet total of no more than €50 million or €43 million, respectively.
How high is the grant?
- Subsidy for eligible expenses up to 50 %, max. € 50,000
- Bonus subsidy: 10 % if the company pays collectively agreed wages or wages equivalent to collectively agreed wages for at least the duration of the subsidized project
- Subsidy can only be granted once within a period of three years
The fact is, if small and medium-sized enterprises want to remain sustainable and competitive in the future, they must also invest in digitization. With the above-mentioned funding programs, the federal government offers two ways to make a significant contribution to supporting SMEs. In addition to the Saxony program, other German states also offer similar options to support local SMEs.
Our long-term partner ARTS deals with the digital transformation of SMEs in its current blog and presents, among other things, helpful tools and gadgets for small and medium-sized enterprises in various use cases. We have also compiled an overview of funding providers here .
Do you have questions about the possibility of funding your digitization project or do you need support and advice in digitizing your processes? No problem! Contact us now and we will be at your disposal as a competent partner with comprehensive expertise from numerous analysis and implementation projects!
Sources: www.bmwi.de (go-digital), www.bmwi.de (Digital now), www.bmwi.de (Überbrückungshilfe III), www.sab.sachsen.de, www.mittelstandsbund.de, www.kfw.de
By the way: As part of the bridging aid III to limit the economic consequences of the Corona pandemic, investments in digitization are now also taken into account. Up to €20,000 in one-time funding is available for digitization projects.