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Financing Your Business in Germany

You have your research, a well written business plan and you know what type of company you wish your company to be. So whats the next step? At this point its probably a good idea to chat with your accountant. They can advice and help you with possible financial options.

Here are some possible ways of obtaining finance:

• Personal/Banking finance An important tool in business is your business plan. This can guide you with your business and will also help your bank decide what financial assistance they can give you.
• Depending on your type of business it may be possible to float your company on a public stock exchange as a way of raising finance. AIM, the junior partner of the London Stock Exchange (LSE), has established itself as the preferred route for younger companies wanting to go public.
• Tax relief Different countries offer different tax relief and incentives. The best way to find out more about your chosen country is to check out the Chambers of Industry and Commerce in the federal Lander - http://www.dihk.de/inhalt/ihk/
• Invest in Germany The German Trade and Invest website can help with finding potential grants, loans etc. www.gtai.com
• European Aid these are grants or/and funds that are direct financial contributions from the EU budget. A useful link is; http://ec.europa.eu/grants/index_en.htm and you can even go the sector that your wish to do business in i.e. transport, audiovisual and media, and environment.

Don't be overwhelmed by the amount of information on obtaining finance. Its important to note that there are over 450 funding sources for reimbursable grants, aid schemes, individual fellow and traineeships, loans and guarantees. These can be awarded from such organisations like the European Commission, the Council of Europe, the European Investment Bank and others. Helpful links are:

http://www.eubusiness.com/funding/eu-funding/european-funds/
and http://cordis.europa.eu/eu-funding-guide/finding-sources_en.html

For small to medium sized enterprises (SME) and the self employed there is The Participation Fund. These are EU backed loans that offer the following:

• The Starteo Loan for companies that have been operating for less than four years. The loan will be no more than €250,000 at a preferential rate of 3% for the first two years. The loan will be granted for five, seven, or ten years and will never be more than four times the investment made by the business.
• The Optimeo Loan Similar to the Starteo Loan is for companies of four years and over in age. The loan is limited to three times the investment made by the business.

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