Business · Economy · 9 hrs ago
Business lending in Germany rises, but firms remain cautious about investment
New lending to businesses and self-employed people in Germany rose 3.4% in the second quarter compared with a year earlier.
It was the strongest increase since the end of 2022, after several years of weak lending.
But the rise does not necessarily mean companies are investing more: some are borrowing short term to cover higher energy costs and other rising prices.
Many medium-sized firms remain cautious about long-term investment because of geopolitical uncertainty and weak growth prospects in Germany.
Some businesses are investing in energy security, digitalisation and transformation, while demand is stronger in areas such as defence and renewable energy.
Business financing costs have risen, and estimates put them at about 5%, up around 1.4 percentage points since February.
The KfW expects the increase in lending to weaken, and says higher interest rates could further slow borrowing.
New lending to German companies and self-employed people rose 3.4% year on year in the second quarter, its strongest increase since the end of 2022.
KfW said the rise did not signal a broader recovery, as some companies borrowed more to cover higher energy and operating costs.
Investment-financing demand among Germany’s broad mid-sized business sector remained subdued, according to Commerzbank.
Companies continued to invest in areas such as digitalisation and energy security, while long-term investment in new production capacity was less common.
Higher financing costs and uncertainty could constrain lending in the coming months.
- Who
- German companies and self-employed people, seeking more credit.
- What
- New lending rose, but borrowing partly reflected liquidity needs while investment demand remained cautious.
- When
- In the second quarter; the article was published on 11 October 2026.
- Where
- Germany.
- Why
- Higher energy costs and prices increased some companies’ need for working capital, while uncertainty and weak growth prospects weighed on investment.
This story does not have two clearly opposing sides.
The second quarter does not represent a turning point.
In the broad mid-sized business sector, demand for investment financing remains subdued.
Energy costs and rising prices are one reason why companies maintain or expand working-capital loans.
Financing costs for companies began rising after the outbreak of the Iran war, according to the article.
New lending rose 3.4% year on year, its strongest increase since the end of 2022.
Handelsblatt published its report on KfW’s credit-market outlook.
- New lending
- Up 3.4% year on year in the second quarter
- Previous peak comparison
- Strongest increase since the end of 2022
- Financing costs
- FCF estimated a rise of about 1.4 percentage points since February, to 5%
- Investment demand
- Still subdued among the broad mid-sized business sector
- Outlook
- KfW said the second-quarter increase was not a turning point
Sources
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