ERP digitalisation loan

Up to €25m at a favourable rate for your digitalisation, with a repayment grant from level 2.

The ERP digitalisation loan (KfW 511/512) is a low-interest development loan from the federal government's ERP special fund. It finances investment and working capital for digitalisation projects at companies with up to €500m in annual group turnover. The programme has three levels: basic digitalisation (up to €7.5m), LevelUp (up to €25m, plus a 3% repayment grant) and HighEnd with AI and big data (up to €25m, plus a 5% repayment grant). Applications run exclusively through your own bank; applying directly to KfW is not possible.

Eligibility

A registered office or branch in Germany; the investment or use of working capital takes place in Germany (KfW information sheet 511/512)
The group's annual turnover is no more than €500m (consolidated, including linked companies)
The application is made exclusively through an approved financing partner (your own bank, a savings bank, a cooperative bank, a building society, an insurer or a financing broker). Applying directly to KfW is not possible
The project must not have begun when the application is made to your bank (no binding order, no supply or works contract before the application)
The project has a clear digitalisation link under the level model (basic / LevelUp / HighEnd)
Not an undertaking in difficulty under Art. 2 no. 18 GBER (where the GBER aid framework applies)
No outstanding EU recovery order for unlawful aid
Not an excluded sector (certain parts of fisheries and aquaculture, primary agricultural production and so on, depending on the aid framework chosen; check the current information sheet)
The same cost items are not funded twice by other public funding
For variant 512 (with a 50% liability release): typically at least two complete sets of annual accounts are required (for the exact condition see the current information sheet 512)

Eligible costs

Hardware investment: computers, servers, mobile devices, network components
Software licences: standard software (office, antivirus, ERP/CRM modules), specialist software
Implementation services: setup, configuration, system integration
Cloud migration and ongoing cloud fees (IaaS/PaaS) connected with the project
IT security infrastructure and concepts (basic to advanced)
Broadband connection and network expansion
Industry 4.0 implementations and digital networking
Building digital business models and platform solutions
Big data applications and AI integration into value-creating areas (level 3)
Training and upskilling staff in digitalisation
Working capital connected with the digitalisation project (staff costs during implementation, for instance)
Taking over and upgrading existing IT infrastructure as part of a coherent digitalisation plan
VAT can be financed too (economically neutral where input tax is deductible)

Common pitfalls

Starting the project early

Any binding order or supply or works contract before the application is made to your bank excludes funding. Planning and consultancy services are harmless, provided they are not part of the investment being financed. Apply first, then order.

Applying directly to KfW

KfW lends exclusively through your own bank. Anyone approaching KfW directly gets no commitment. Your bank submits the application through the KfW partner portal.

Claiming too high a level

KfW can downgrade you if level 3 (HighEnd) is declared but in fact only a standard cloud migration is involved. That cuts the repayment grant from 5% to 3% or removes it. Justify the level assignment cleanly with qualitative and quantitative evidence.

The de minimis ceiling is exhausted

The total of all de minimis aid over the last three tax years may not exceed €300,000 (Regulation (EU) 2023/2831). Record all current aid before choosing the de minimis framework. From 2026 there is also a duty to report to the EU de minimis register within 20 days.

Double funding of the same cost items

Combining with other funding programmes (Digital Jetzt, state funding) is permitted in principle, but the same cost item may not be funded twice. Set up separate cost centres per funding programme.

Quoting fixed interest rates

Interest rates depend on creditworthiness and security and change daily. The rate has to be taken from the KfW rate display at the time of application (www.kfw.de/konditionen). Don't quote static figures in proposals.

The application process

1. Check eligibility and the level assignment. Confirm mid-sized status (group turnover ≤ €500m) and the digitalisation link. Assign the project to one of the three levels (basic / LevelUp / HighEnd). Choose the variant: 511 without a liability release or 512 with a 50% liability release (recommended where security is thin; typically requires at least 2 sets of annual accounts).
2. Assemble the documents. The last two sets of annual accounts, current management accounts and trial balance, debt service and liquidity planning, a detailed investment and cost plan, an SME/mid-sized status declaration, a de minimis declaration, a self-declaration that you are not an undertaking in difficulty, and a digitalisation and financing plan.
3. Meet your bank. Submit the documents to your bank. It assesses creditworthiness, security and viability by its own standards and decides on the application. Where useful, approach several financing partners in parallel.
4. Your bank submits the application in the KfW partner portal. Your bank submits the application (programme variant 511 or 512, level, loan amount, term, aid framework) through the KfW partner portal. A direct application by the company to KfW is not possible.
5. KfW review and commitment. KfW checks programme eligibility, the level assignment and the aid framework. If the review is positive, KfW issues a commitment to your bank, typically within a few working days. Total time from a complete application: around 2–6 weeks.
6. Loan agreement, drawdown and statement of use. The loan agreement is concluded between your bank and the company. Only start the project AFTER the application. Draw down the funds within the agreed period. Archive the records and provide the statement of use to your bank and KfW in line with the general terms for investment finance.

How upsmart helps

We match your digitalisation project against all three levels (basic, LevelUp, HighEnd) and against suitable combinations — Digital Jetzt, state digitalisation funding — including a cumulation check at cost centre level. We prepare the application documents for the bank meeting ready for scrutiny: the digitalisation and financing plan, the de minimis declaration, the self-declaration that you are not an undertaking in difficulty. We keep an eye on the project start date and on the 20-day reporting deadline in the EU de minimis register. You decide, your bank files the application.

Combining it with other programmes

In principle it can be combined with other funding programmes (Digital Jetzt from the BMWK, state digitalisation funding, guarantee programmes) as long as the same cost items aren't funded twice and the cumulative aid ceilings are observed. Separate cost centres per funding programme are essential.

Frequently asked questions

Freelancers, sole traders, SMEs (fewer than 250 employees, turnover ≤ €50m or a balance sheet total ≤ €43m) and larger mid-sized companies with annual group turnover of no more than €500m can apply. A registered office or branch in Germany and a clearly delimitable digitalisation project are required.

At level 1 (basic digitalisation) the loan is up to €7.5m with no repayment grant. At level 2 (LevelUp, ERP/CRM, Industry 4.0) and level 3 (HighEnd, AI, big data) it is up to €25m each, plus a repayment grant of 3% (level 2) or 5% (level 3) on the loan amount drawn, capped at €200,000.

A direct application to KfW isn't possible. You approach your own bank or another approved financing partner. After a credit assessment they submit the application through the KfW partner portal. Important: the project may only start after the application, with no binding order beforehand.

Both products finance the same digitalisation projects. The difference is the credit risk: under 511 your bank carries 100% of the risk. Under 512 KfW takes 50% as a liability release. Variant 512 makes loans possible that wouldn't come about without that risk transfer, but typically requires at least two complete sets of annual accounts.

The interest rate depends on creditworthiness and security and changes daily. KfW assigns nine price classes (A to I); your bank determines the class from its credit assessment. Current rates are available only from the KfW rate display at www.kfw.de/konditionen at the time of application.

Read on in the blog

Funding strategy across the innovation process

Primary sources

KfW product page, ERP digitalisation loan (511/512)— KfW Bankengruppe
KfW information sheet 511 (without risk transfer)— KfW Bankengruppe
KfW information sheet 512 (with risk transfer / liability release)— KfW Bankengruppe
KfW rate display (current interest rates)— KfW Bankengruppe
KfW on digitalisation— KfW Bankengruppe

A 30-minute demo on your actual case. We'll show you how the platform structures funding programmes and makes overlaps with other schemes visible.