The plan, first revealed on Saturday by newsmagazine Der Spiegel, would give so-called Mittelstand firms access to a €15-billion line of credit through the state development bank KfW.
The report by Der Spiegel is based on a memo the magazine obtained from the office of Economy Minister Michael Glos.
The government also wants to expand a KfW program to fund energy-saving investments for German cities by a further €3 billion and increase a similar program for companies by another €1 billion.
The move follows a series of initiatives by the German government to support the economy. Last week, the government said it would lift the tax on new cars for two years for low-emission vehicles in an effort to boost the German auto industry.