Financial support and funding for your business
Do you need money to help you realize your plans and projects? Read on to find out about governmental incentives and other financial services available in Germany and the City of Munich.
Guidance for foreign investors
An extensive online guide for investors is available from Germany's economic development agency Germany Trade and Invest (GTAI). The guide lists and describes a variety of programs designed to support economic activities at different stages of the investment process. The support provided ranges from cash incentives to labor-related and R&D incentives.
The Business Promotion Agency Invest in Bavaria supports companies from abroad to set up and expand their business activities in Bavaria.
Government grants and incentives
The German government makes grants and incentives available to certain target groups and for certain projects. For example, people seeking to start a business as a way out of unemployment may be eligible for a start-up grant from the Federal Employment Agency. People thinking about launching a business and new start-ups can also take advantage of government-backed coaching programs.
Finance, support and subsidies (video tutorial)
An assortment of other grants and subsidies (such as EXIST, FLÜGGE, BayTOU, SIGNO sponsorship for SMEs, innovation vouchers for SMEs and Erasmus for young entrepreneurs) are provided by the national and regional governments and by the EU. The various options can be researched in the grants and subsidies database run by Germany's Federal Ministry for Economic Affairs: www.foerderdatenbank.de
All public financial assistance is disbursed via "house banks": Start-up entrepreneurs cannot obtain loans directly with public funding bodies, but only via a regular financial institution of their choice. Applications for a loan must always be submitted before the project to be financed commences.
As a rule, public loans provide very attractive terms and conditions, i.e. low interest rates, long maturities, initial periods of grace and the possibility of being exempted from liability.
- LfA Förderbank Bayern
LfA Förderbank Bayern is a special-purpose bank operated by the Free State of Bavaria. Its mission is to promote lasting economic development in Bavaria. In this capacity, the LfA provides long-term, low-interest loans, guarantees against default, exemptions from liability, other guarantees and investment capital to start-up entrepreneurs and small and medium-sized enterprises (SMEs).
- KfW banking group
The KfW banking group supports SMEs, entrepreneurs, freelancers and start-ups by providing credit facilities, subordinated loans, investment capital and advice. Its financial assistance ranges from start-up financing of up to EUR 100,000 tailored specially to the needs of start-ups and young companies to investment capital in the millions of euros. In this context, KfW focuses primarily on financing new businesses, capital spending and innovation.
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.
Crowdfunding is an emerging alternative financing vehicle that has experienced a recent boom in Europe and North America. Campaigns are usually launched via the Internet and are often used by start-up companies. Different types of crowdfunding include equity-based crowdfunding, credit-based crowdfunding and regional crowdfunding platforms, for example.