How much money do you need for your start-up? Many people starting out in business calculate with too tight a budget and then run out of money halfway through either because business didn't go as well as they had hoped for or due to some other unexpected event. You should always include a buffer in your financial planning.

Equity requirement?

How much money can you invest in your project? If you are setting up a small office or a small company, you may even be able to finance it by yourself. In most cases, however, you will need to borrow money. And this is usually not possible without equity. After all, nobody should rely entirely on third-party financing and you will not be able to find anyone who will lend you money if you yourself are not willing to invest a reasonable amount of your own money in your project. If you do not have enough money to get your business up and running, you should look for other sources of finance as soon as possible. As a rule, start-up financing is made up of a government assistance loan, a bank loan and the founder's equity.

What about collateral?

Every investor will, of course, want security in case the borrower is not able to pay back the loan. In the case of bank loans, collateral is required. This can be cars, securities or real estate. Even public loans may also require that a certain percentage be secured by collateral. However, when it comes to collateral, there are some things you should remember. Using the home in which you live as collateral could be a problem. The same applies to life insurance policies for when you retire.

Support and subsidy programmes

The federal government, federal states and the European Union offer support programmes to assist people starting out in business. This support usually comes in the form of loans. Public loans typically come with low interest rates, long terms and often with a redemption-free period before you begin repaying the loan.

The most important federal government support programmes for people starting out in business:

You can use the public support loans My micro-loan [Mein Mikrokredit], ERP capital for start-ups [ERP-Kapital für Gründung] and ERP StartMoney [ERP-StartGeld] along with assistance under the Micro-mezzanine fund for Germany [Mikromezzaninfonds Deutschland] to finance plant, property, plant and equipment, inventories and/or working capital. Plant, property, plant and equipment are fixed assets. Financing is provided for operating and business equipment as well as the acquisition of real estate. Working capital [Betriebsmittel] refers to current assets, i.e. operating costs.

EXIST Business Start-up Grant supports students, graduates and scientists from universities and research institutes who want to turn their business idea into a business plan. The start-up projects should be innovative technology or knowledge based projects with significant unique features and good commercial prospects of success.

When should you submit your application?

Your application must be submitted before you launch your project or before you invest. You should hence not sign any purchase agreement, order goods or commission services before financing has been secured. Simply registering your business does not have any adverse impact on support.

Where should you submit your application?

Submit your application for My micro-loan [Mein Mikrokredit] to a micro-financing institute.
Submit your application for funds under the Micro-mezzanine fund for Germany [Mikromezzaninfonds Deutschland] to Mittelständische Beteiligungsgesellschaft in the federal state where you want to establish your business.
Applications for a start-up grant should be submitted to your employment agency [Agentur für Arbeit].

Applications for ERP loans should be submitted to your own bank, i.e. commercial bank, savings bank [Sparkasse] or [Volks- und Raiffeisenbank] where you have your current account or where you wish to open your business account.

Which documents should you bring with you?

  • Business and investment plan
  • Sales and profitability forecast for two years
  • List of assets and debts
  • Tabular CV
  • Investment plan
  • Overview of your collateral, including, for instance, real estate, vehicles, machines. Your bank will decide on the value of the collateral provided by you.
  • Monthly liquidity plan for one year.

You can also find useful information in our Tips for your bank meeting.

How much equity do you need?

As a rule, your equity should total at least 20% of the costs that are eligible for support.

What will happen to the documents?

Your bank will check your credit rating and decide whether to forward your application to KfW or to the funding institutions in the federal state where you want to set up your business.

How will you receive support?

Funding must be used for a specific purpose. You will have to present your bank with the invoice or the purchase order for the planned investment. The respective amount will then be transferred to your business account.

More information and advice can be found at:

BMWK support database

Federal Ministry for Economic Affairs and Climate Action

Financing hotline
Tel.: 03018 615-8000
Monday to Thursday from 9am to 4pm, Friday from 9am to 12 midday

KfW information centre

Tel.: 0800 539 9001 (toll free in Germany)
Monday to Friday from 8am to 6pm

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