Financing and public support
How can you fund your new business? What support could be available for you?
There is a wide variety of financial assistance available for entrepreneurs and companies. The list below is just a small selection. Always seek professional advice!
Loans from your principal bank and public support loans (LfA and KfW promotional banks)
You can apply for a loan from a bank of your choice: your “principal bank” (“Hausbank”). Check out the services and terms offered by various banks. Start-ups can also access public support loans from the LfA and KfW development banks which you can apply for via your principal bank, just like any normal bank loan.
For the bank, your business plan is the most important basis for decisions about whether or not to lend you money. It is therefore vital to ensure that you already have a complete, well-prepared business plan with you the first time you visit the bank.
Another important consideration with bank loans: Contact a principal bank and apply for a suitable loan before committing to any financial risks (e.g. signing contracts or purchasing equipment).
Whether or not you are given a loan depends critically on how the bank rates your creditworthiness (personal skills, economic reliability, future prospects of your start-up) and if the bank sees the nonpayment risk as reasonable. To cover the possibility that you may not be able to repay the loan and the interest charged, banks will ask you to provide collateral.
Where traditional bank loans are not in the frame for your business activities, microfinance can be a useful alternative.
Microfinance is suitable for smaller credit volumes, but can be increased to a maximum of EUR 20,000 provided the principal is fully repaid. Microfinance solutions can be accessed via accredited microfinance organizations.
These organizations meet credit applicants in person, provide one-on-one advice and recommend that the GLS Bank approve their application. A microloan fund set up specially by federal government provides the GLS Bank with a safety net in the event of loan defaults. Effective interest rates and standard terms and conditions are standardized for the whole of Germany. Beyond that, however, the microfinance organizations decide for themselves what security loan applicants must furnish, as they are required to foot the bill for non-performing loans.
Equity in the form of venture capital can complement a bank loan or be used as an alternative to it, with partners contributing this venture capital to your activities.They can be private equity companies, venture capital firms or business angels. Business angels are experienced entrepreneurs who provide not only their capital, but also their expertise and networks.
Possible points of contact:
Crowdfunding involves collecting money from a large number of people via an Internet platform to realize business ideas, products or projects.
Crowdfunding financing program from the City of Munich
Commercial and freelance entrepreneurs in Munich can be financed up to EUR 3,000. At the moment 75% of the costs for creative services involved in a crowdfunding campaign are covered, e.g. costs for videos, graphics, copywriting, PR/social media etc.
Munich Crowd Program: Follow-up financing
The Munich Crowd program is offered by the the Stadtsparkasse München [Munich Savings Bank]. Use the successul crowdfunding campaign as a convincing argument for your follow-up financing if you want to start a business as your main source of income.
Grants and subsidies
Certain conditions must always be met when applying for grants and subsidies. Always seek professional advice!
The list below is just a small selection. You can see an overview of all options in the financing database:
BMWi financing database | Federal government, federal states, EU
Innovative and research-intensive start-ups in high-tech industries can apply for special subsidy and support programs and innovation vouchers for their R&D activities. The Chamber of Commerce and Industry (IHK) for Munich and Upper Bavaria offers information and advice concerning support programs for innovations.
Cultural and creative industries
The City of Munich’s Cultural and Creative Industries team provides cultural professionals and creative individuals with free advice and support on:
- Self-employment and qualifications
- Networks, events and financing
- Finding studios, rehearsal space and exhibition space
- Assistance with applications and approvals procedures
Start-up grant from the Federal Employment Agency
Start-up entrepreneurs who receive unemployment benefit (ALG1) before going self-employed can receive a start-up grant from the Federal Employment Agency (“Gründungszuschuss der Agentur für Arbeit”).
- YouTube Tutorial "What is a startup grant and how do you apply for one?"
Subsidies for coaching and advice
Start-up entrepreneurs can apply for (pre-)start-up coaching support for the development of business expertise. The coaching support programs contribute subsidies of 50 to 70% for management consulting. To apply for get in touch with possible points of contact.
Possible points of contact: