The leap into self-employment is exciting - and associated with many uncertainties. Financing is often the biggest hurdle for budding entrepreneurs. But that doesn't have to be the case! The right funding at the start of self-employment can make the difference between a dream and the reality of your own business idea.

Find out what funding options are available in our article and take the opportunity to get the right start-up support for your business.

These types of funding are available

Funding at the start of self-employment or business start-ups is financial assistance provided by the public sector or private institutions to support founders in the initial phase of their entrepreneurship. They aim to successfully bridge the financially uncertain initial phase of the start-up.

There are different types of funding that you should be aware of:

- Grants: This form of funding is particularly attractive as it usually does not have to be repaid. Grants are often awarded for specific purposes, such as purchasing equipment or hiring staff.

- Loans: Promotional loans often come with more favorable terms, such as lower interest rates or more generous repayment periods. They are particularly suitable for larger investments that require long-term financing.

- Guarantees: If you as a founder cannot provide the necessary collateral for a conventional loan, a guarantee can help. A guarantee from a development bank or other public institution secures the loan, which makes it easier for banks to grant loans.

Requirements for applying for funding

The criteria for applying for and being granted funding can vary greatly depending on the type of funding and the institution offering it. In most cases, applicants must fulfill the following conditions:

- A detailed and realistic business plan is almost always required. It should include a clear description of the business proposal, market analysis, financial projections and a plan for the use of the funding.

Need help putting your business idea on paper? In this article from us you can find out how to write a business plan using AI and other useful tools.

- Legal form and registration: Most funding programs require your company to be officially registered and have a suitable legal form.

GbR, GmbH or freelancer status? Here we have summarized the most important steps for setting up your business.

- Location and sector: Some funding is regionally or sector-specific in order to promote local industries or certain sectors in particular.

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Incidentally, you can also use the business address of your virtual office to register your business with the tax office - you can find out how to do this in this article from us (English and German version available).

Overview - the most important funding programs at federal and state level

The start-up grant from the Federal Employment Agency is one of the best-known subsidies for starting your own business. This grant is aimed at people who are unemployed or will soon be unemployed and want to start their own business.

- Conditions: To be eligible for the start-up grant, you must have at least 150 days of unemployment benefit remaining at the time of starting up.

- Application process: The application for the start-up grant is submitted to the Employment Agency. In addition to the completed application form and a business plan, proof of professional qualifications and a statement from an expert body, e.g. from chambers of commerce (IHK/HWK), industry associations, tax consultants, auditors, experienced management consultants or specialized financial service providers, must be submitted. This statement confirms that the business idea and the business plan are realistic and economically viable.

The KfW start-up loan from the Kreditanstalt für Wiederaufbau (KfW) offers various loan programs that are specifically designed to provide financial support for start-ups.

- Variants: The KfW Start-up Loan StartGeld and the KfW Start-up Loan Universal are two popular options. The StartGeld is designed for smaller projects with a financing requirement of up to EUR 100,000, while the KfW-Gründerkredit-Universell is suitable for larger projects with a financing requirement of up to EUR 25 million.

- Advantages: Both loans are characterized by low interest rates, long terms and redemption-free start-up years. In addition, KfW assumes part of the risk, which increases the chances of a loan approval from your house bank.

In addition to the nationwide offers, there are a large number of other regional and industry-specific funding programsthat are tailored to specific regions or sectors. These programs can include grants, loans or consulting services and are often designed to strengthen the local economy or drive innovation in specific fields of technology.

- Examples: In many federal states, there are start-up grants specifically for technology-oriented start-ups or for business start-ups in structurally weak regions. Some states also offer subsidies for business consulting or coaching in the first year after the start-up.

Golden tip: Do your research! Researching various funding sources, especially smaller and regional initiatives, can be extremely valuable for start-ups and new businesses. Often these smaller funding pots are less well known, which means there is less competition when applying. By finding out about and applying for such opportunities, you could secure valuable resources that will give your business a decisive advantage and financial support!

Inspiration: From start-up funding to global market leader

Starting out with funding doesn't mean a lifetime of baking small buns - quite the opposite. One particularly impressive success story is that of the Mainz-based biotechnology company BioNTech, known for developing one of the first COVID-19 vaccines. In its early stages, the company received funding for the research and development of new therapies in medicine. These grants, including funding from the German Federal Ministry of Education and Research, have contributed significantly to the company's current success, as the company was able to advance its mRNA technology in the early stages, which later formed the basis for the COVID-19 vaccine and its global success.

Conclusion: By taking advantage of a wide range of funding opportunities, you can significantly stabilize your company financially in the fragile initial phase - you just have to know about them and make an effort! Once you have funding in your pocket, you can concentrate on building and developing your company with less financial pressure.

Seize the opportunity and get the best possible start-up support for successful self-employment!