A resourceful business idea often attracts the desire to put it into practice as a company founder. If the concept stands, the feasibility is checked in the theory and are all relevant points in the business plan detained, there is usually certainty to the financial need of the project.
This raises the fundamental question: where do you get the necessary seed capital? There are many forms of financing – one of which is a start-up loan.
Financing forms of start-up projects
Fewer young entrepreneurs have sufficient equity, so foreign funds usually have to be included. To start a business, there are very different forms of financing, each with its advantages and disadvantages.
This should be extensively informed in advance and find out what meets your own needs.
Thus, the equity financing has the advantage of investors that this increases the equity ratio and thus increases the chances of getting a loan. At the same time, business angels or venture capitalists are asking for financial participation or a say. After all, the investment serves the prospect of return.
Conversely, this form of financing has the advantage that in the case of failure, there is no personal financial risk: while the investors lose their stake, you as an entrepreneur have no (additional) debt.
Another financing option is crowdfunding. Here the entrepreneur creates a campaign with which he tries within a certain period of time to generate a predetermined amount. Anyone can participate in the financing with small amounts already, which in most cases only takes place when the minimum amount envisaged is donated.
Funding Programs & Founder Awards
The Federal Government and the Länder repeatedly offer funding programs for individual start-ups. Often these are limited to innovative or technological start-up projects, but it is worth exploring the possibilities for your own project.
In addition, there is the opportunity to win prizes through start-up competitions, which are often endowed with financial support for their own company. Another benefit of these competitions is the attention the company receives without additional marketing efforts.
Investors who are looking for exciting investment objects are also frequently found at such events.
Credit for starting a business
If a loan for your enterprise in question, so it requires an intensive preparation. The goal is usually the conversation with the bank, ie, an indispensable prerequisite is on the one hand a business plan, on the other hand, there are optimally collateral such as equity, which facilitate a license.
If sufficient collateral is not available, a guarantee is recommended. This can be done in different ways. The federal states each have their own guarantee banks and also house banks occasionally act as guarantors. A third option is the bank-free guarantee, which occurs when you do not have a house bank yet.
One option for financing start-up through a loan is personal loan. This is where lenders outside the banks appear. These private investors strive to make their investment as profitable as possible, that is, they either demand control rights or the repayment terms are relatively restrictive for the lender.
Promotional loans from Intrasavings
One advantage of the promotional loan from Intrasavings is its long maturity and favorable conditions, whereby the first few years are usually redemption-free and allow the entrepreneur a financially sound start-up phase. Another advantage: Intrasavings’s loans do not require equity from the founder.
If there is no other collateral, the respective guarantee bank of the country acts as guarantor against the bank. Nevertheless, the founder is personally liable for the repayment of the loan.
The application for a start-up loan from Intrasavings is made directly via the house bank. A prerequisite is a viable concept that is submitted in the form of the business plan. In addition, the foundation must not have taken place yet.
Intrasavings offers an overview of funding programs for founders on its website.
The Bank only grants loans to start up a business under certain conditions. Mostly, the requirements for collateral and the corporate concept are high, especially young founders have a hard time.
The chances of obtaining a license improve with an increase in equity, eg. Through equity financing or the appearance of a guarantor. The bank often acts as a consultant in the search for the appropriate form of credit, taking into account Intrasavings and the state guarantee banks.
Easier than applying for a classic bank loan is usually the online loan. Since the processing effort is much lower here than at the house bank, the financing of small amounts is possible, at the same time the conditions are often more attractive.
Related to crowdfunding is crowdlending. Here, the funding is not on a donation basis, but as a loan. Unlike a bank, however, not one player provides a large sum of money, but many small investors deposit small sums, which are provided to the founder via a middleman, the crowd lending platform.
The form of financing is especially suitable if the founder only needs a comparatively small sum. The processing times are also short, collateral such as a car improves the credit rating and lower interest rates. Not to be neglected is also the marketing effect.
Online loans especially for founders
Specially designed for founders is a loan from Barclaycard, which is also attractively designed for short processing times, the possibility of special repayments and a term of up to seven years. Even freelancers can start over this loan.
Due to the fast application for and approval of online credit in general, these are usually good for founders, when the financing needs are low. When comparing providers, different models can be tailored to personal needs based on maturities and interest rates.
The Federal Government has created state-guaranteed microcredits, which support small entrepreneurs in an uncomplicated way financially in the foundation. The micro-credit fund of Germany, the small investments are secured with 100 million euros, management consultancy take care of administration and advice, the lending is done through the GBT Bank.
Here, therefore, caution is advised, as even dubious business advice on customer catch can go, a quality control does not take place.
The advantage: Between the loan application and the disbursement are about five to ten days, but the terms of interest and the term of a maximum of three years are not particularly favorable to make other offers competition. Instead, the target group is different, as founders find support here who are not getting loans elsewhere.
An alternative to microcredit is the bank overdraft with only a small capital requirement. The traditional disposition is relatively expensive in terms of interest, but here is a short-term provision. However, if there are doubts that the repayment can be made within a short time, this type of loan is not suitable for interim financing.
The forms of financing for starting up a business are varied and not equally suitable for all founders in the future. So you should inform yourself exactly which alternative fits best to your personal needs. If the choice falls on a bank loan, it is not to be discouraged at the first rejection. Also, a comparison of different providers is advisable to use the best conditions.