we are applying for a credit limit and need to justify it, what should I write

Substantiation of credit limit is based on cashflow, not on turnover

When granting a credit limit, the bank primarily wants to see that the company can bear the interest and repayment, and in doing so looks at the current cashflow, working capital requirements and the collateral underlying the limit. Substantiation that only shows turnover or the order portfolio is usually insufficient: the bank asks for liquidity forecasts, the development of debtors and creditors, and often for the average payment term to suppliers, because that indicates how much working capital the company is already parking elsewhere. Figures from the bank's own client due diligence — the "Know Your Customer" data already recorded in the credit relationship under the Wwft — usually do not need to be resubmitted, but recent annual figures usually do, even if they have already been filed with the trade register.

In addition to the financial substantiation, the bank often also asks about the structure behind the application: who actually bears the credit decision and acts as guarantor. This touches on the question who are the ultimate beneficial owners of the company, especially in the case of a new or increased limit, because the bank must then update the client due diligence. If the company does not yet have a current rating or auditor's statement, the answer is not "no" but an explanation: which figure is available, and from when. A missing piece does not have to be an obstacle if the bank sees why it is missing and what is available instead.

Legal basis: Wwft client due diligence and Trade Register Act

The bank's obligation to request substantiation does not come from a credit regulation but from the ongoing client due diligence of the Anti-Money Laundering and Terrorist Financing Prevention Act: the bank must be able to explain the business relationship and the origin of funds, even after the credit has been granted. The data on annual figures and management that the bank requests are partly already recorded under the Trade Register Act 2007; what is already filed there can be verified by the bank without the entrepreneur having to submit it themselves.