Especially in the start-up phase, start-ups do not have much equity to get their business going. It is normal that a loan for start-ups is often considered. There is simply too much on the investment list to be able to do it all with equity. There are also the monthly fixed costs that also have to be paid.
Credit from the house bank
Start-ups can turn to the house bank for a loan. Even if they receive grants, the house bank must be visited if a loan is to be granted to start-ups. The bank decides whether an application can be approved or rejected. The bank knows the personal circumstances and the customer, so that only a good basic concept has to be presented, which will convince the bank to grant a loan.
Start-ups can benefit from grants and grants. If you want to take out a loan. The funding agency assumes the risk for the entrepreneur if he can no longer repay the loan. These payments are then taken over in part or in full. The so-called house bank principle is then used because the money comes from the house bank and not from the place where the funding is given.
For example, grants and grants can be asked from the federal and state governments and local authorities. KfW Bank is a very popular place. Not much equity is needed to build a livelihood here. In addition, the applicant does not have to begin repaying the loan until the second year after the application is made, so that there is enough air before payments can begin.
What are the requirements?
The concept that has to be presented to the bank must be valid. The bank must be as convinced of the concept as that of start-ups, otherwise no loan will be granted to start-ups. Collateral is always a top priority at banks, so it is important to have a regular income. This kind of security can only partially be fulfilled by start-ups, because they earn money, but they always have it in irregular amounts.
However, if you can improve your creditworthiness, you have a good chance of getting a loan. A guarantor can help to improve creditworthiness in order to obtain a loan. A guarantee is very popular and is accepted by every bank. This is because the bank basically has two instead of one borrower. The guarantor uses his income to secure the loan. This can be a relative, a friend or a business partner.
If you cannot find a surety, you may have insurance. Pension and life insurance are also recognized as security. This only has to have a high surrender value, at least as high as the loan amount, so that it can be used. As soon as one of the collateral has been accepted, a business start-up loan can be taken out.