Subsidies for Start-Ups - Part 11b. Step by Step Into Self-Employment on the Net
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| Photo by Lala Azizli on Unsplash |
In today's part 11b of the article series, I would like to introduce the most common offers for promoting business start-ups. (The article was updated in late 2018.)
<< Part 11a - Financial Tips
>> Part 12 - Insurance
[Overview of the article series " Step by step into independence on the Internet "]
Overview of Funding Measures
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| Subsidies for Start-Ups - Part 11b. Step by Step Into Self-Employment on the Net |
It is not that easy to keep track of the possible funding measures.
On the one hand, this is because there are not only national funding programs that are suitable for all German citizens. There are also individual funding opportunities in each federal state, which can hardly be overseen.
On the other hand, the funding instruments change every few years and so there is no longer, for example, the bridging allowance that I received around 5 years ago.
To the funding check for founders and the self-employed.
Subsidies for the Unemployed
On the one hand, there are grants specifically for the unemployed, both of which can be applied for at the employment agency.
Start-Up Grant
That would be the start-up grant. This is, so to speak, the successor to Ich-AG and bridging allowance.
The reason for this was that the Ich-AG was abused quite heavily because the business idea was not examined there. This is different from the start-up grant. There are a few other differences, all of which are aimed at ensuring that the start-up grant is used to start-up and eliminates the deadweight that was present with the Ich-AG.
You have to be unemployed for at least 1 day and be entitled to unemployment benefit for at least 150 days to be able to claim this subsidy. In addition, despite legal entitlement, the viability of one's concept and one's qualifications must be proven.
The funding period for the start-up grant is a maximum of 15 months. In the first 6 months (there used to be a legal entitlement to at least the first 9 months) the start-up receives a grant equal to his previous unemployment benefit plus 300 euros for social insurance.
After this time it is possible to continue receiving the 300 euros for social security for up to 9 months. However, this is a discretionary decision by the Employment Agency.
Normally, the start-up grant does not have to be repaid.
Further information can be found in this PDF from the Employment Agency.
Entry Allowance
For all recipients of unemployment benefit II (Hartz IV), entry allowance is a way of promoting business start-ups. It is a discretionary service, so there is no legal entitlement.
The duration of the benefit can be up to 24 months. The basic security provider decides that. The amount of funding is also determined individually based on several factors. The duration of unemployment and the size of the benefits community play a role.
As a recipient of ALG II, you are automatically insured through the employment agency in health insurance * and pension insurance. (Pension insurance contributions have not been paid since the beginning of 2011. The previous entitlements are merely maintained.)
Start-Up Grant or Entry Fee?
That depends on the individual case. It can be worthwhile to postpone the founding and choose the entry fee.
However, anyone who is seriously planning to start their own business should tackle this as soon as possible and not procrastinate for a few euros.
Advice and Coaching
Funding is often only equated with financial aid. Advice and coaching play an important role in this. Because many start-ups have the technical know-how in their specialty, but no commercial knowledge.
Therefore, funding is also offered in this area:
"Promoting Entrepreneurial Know-How" of the ACFA
The ACFA has with the counseling program "Promoting entrepreneurial know-how" for a successor to the founder coaching.
Only companies that have already been founded but have not been on the market that long are supported. There are different criteria here, such as young companies that are not older than 2 years, but also companies that have got into difficulties.
Up to 80% of the consultant's fee is subsidized, depending on the state and region. In addition, the maximum grant is between 1,500 and 3,200 euros.
In terms of content, there are stipulations of what coaching can and shouldn't be about. For example, predominantly legal and insurance issues, ethically and morally unjustifiable or law and order violating content and so on are not funded. Here the line is quite narrow. The coach can teach you how to do the bookkeeping, but he's not allowed to do them.
IHK
The Chamber of Commerce and Industry also offers a range of services for start-ups. There are, for example, short seminars lasting several days that are offered directly by the Chamber of Industry and Commerce or a partner for a fee. There you get, so to speak, a crash course in the most important commercial topics.
I went through something like that at the time and it was more like that you became aware of what you still had to learn. The 3 days are of course not enough but sensitize many start-ups who have not thought about it beforehand.
At that time I even received a seminar lasting several months through the Chamber of Industry and Commerce, which took place once a week (all day) and also contained financial support. Something like that doesn't seem to exist anymore.
You should stop by your local Chamber of Industry and Commerce and have a consultation. As already mentioned, many other start-up grants are tailored to specific groups (e.g. female founders).
Financial Support
Of course, in addition to support for unemployed founders, there is also financial support for business start-ups who do not come out of unemployment.
KfW Entry Fee
KfW offers various things, including the KfW entry fee.
You can apply for a loan of a maximum of 100,000 euros, of which a maximum of 30,000 euros may flow into operating resources.
The money must of course be paid back, although there is a possibility that the first 2 years will remain redemption-free. The interest rate is of course relatively low here.
Further Financial Support
It would be pointless to list the further financial support here.
On the one hand, KfW offers many other promotional instruments aimed at specific founders and companies.
On the other hand, there are, for example, various funding instruments from the HWK that you should take a closer look at if necessary.
Here is an overview (PDF) of the funding from the IHK Potsdam, which shows that there are numerous other options at the IHK.
And there are also a large number of smaller initiatives regionally that may come into question. In Saxony-Anhalt, for example, there is the “ego. Business start-up offensive”, for which there are also subsidies.
Here you can get advice on the right funding for start-ups and self-employed people.
Further Information on Funding
The Federal Ministry of Economics and Technology offers a funding database in which you can find all possible regional funding programs that are offered in your federal state by the federal government, the state, and the EU.
Conclusion
Even if savings measures repeatedly lead to restrictions on individual funding measures, there are still some funding opportunities for start-ups that founders in other countries can only dream of.
I noticed for myself how difficult it is in the first 1-2 years and without the support at the time it would certainly have become more difficult.
In any case, you should inform yourself personally and go to the IHK and KfW.
So It Goes on
Part 12 of the article series “Step by Step into Self-Employment on the Net” continues with the topic of “ Insurance ”. Which ones make sense for self-employed people on the net and which ones do you have to have?
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