Self-employed loans: How to finance your business idea

Implementing a business idea is anything but easy. There are many things business founders need to think about and that need to be overcome before starting a business. Advice and information must be obtained, location and legal issues clarified, plans drawn up, notifications completed … The most important factor for a successful start-up, however, is the financing. Only if this is secured, the further steps are worthwhile.

Basically, founders can finance themselves from two sources: equity and debt. Without equity, which can be used as a reserve for unscheduled events, no start-up should start. Financial reserves for emergencies are a must for any founder. However, only a few sole proprietors, small business owners or founders will be able to finance a start-up project exclusively from their own resources.

The following possibilities of credit financing are available for entrepreneurs:

bank loans

bank loans

The classic way of leveraged start-up is via a bank loan. A distinction must be made between overdraft facilities for the financing of operating equipment, goods or to ensure the operation of operations and loans for the financing of investments, for example in land, machinery, equipment, office and business equipment, company vehicles and the like. ä.

The entrepreneur must undergo a thorough examination of his project and his business idea, credit rating and financial planning. Credit application, business plan, self-assessment, proof of any collateral and account statements must be submitted. Every future self-employed person should thoroughly prepare for the conversation with the bank adviser, the personal impression counts when assessing the creditworthiness of the founder. The future company owner must be able to explain his business idea and the basics for the planned growth convincingly. Credit requirement is a query at the credit bureau. Only the customer, who has no negative characteristics at the credit bureau such as arrears or bankruptcy, gets money from a bank for a company foundation.

The easiest way to obtain bank financing is to be able to assign sufficient bank-standard collateral such as land charges, sureties, receivables, life insurance, securities accounts and other credit balances. Even for part-time start-ups, the chances of a loan are greater, since the basis is a fixed income. Only a few banks finance start-ups without further ado. In some lending houses, some sectors are excluded from the outset from financing, for example, where there is already an oversupply of certain services. The less equity there is, the lower the chances of obtaining a loan. This is due to the high level of uncertainty which, when setting up a business, is subject to sales and profit forecasts and the repayment of the loan or loans. The higher the equity ratio, the better the financing conditions.

subsidized loans

subsidized loans

Since it is sometimes difficult and sometimes very expensive to obtain a bank loan as a start-up, promotional loans help to better structure the financing and to replace missing own funds or collateral. Promotional banks such as Intrasavings bank provide low-interest loans, some of which offer repayment-free years for the initial phase of the project. At Intrasavings bank, young entrepreneurs without equity also receive start-up money.

The application for start-up loans is made via the house bank. Intrasavings bank gives guarantees to the house bank. Intrasavings bank’s willingness to indemnify the commercial bank in full or in large part makes the bank, in conjunction with Intrasavings bank loans, more willing to assume a lending risk. The loan agreement will be concluded with the account-holding bank after approval by Intrasavings bank. The loan application must necessarily be made before starting self-employment. Other development banks also provide guarantee loans or investment loans.

Crowd lending

Crowd lending

Crowdfunding is the generic term for various alternative forms of financing over the Internet, where a large number of small lenders, the swarm or the crowd, subsidize a project. It is believed that the amount of lenders has the intelligence to promote the right projects. Founders and startups can collect debt via crowd lending. Crowdlending is a form of crowdfunding in which the borrower provides financial compensation from the return flow of the project. Supporters and investors invest their money in economic terms. The loan is provided with a fixed interest and a fixed term. Donors can be both entrepreneurs and individuals. Even if investors only invest with very small amounts, up to six-figure loans can be raised by capital seekers.

In crowdlending, the founder or entrepreneurs have to imagine the business idea on a platform that establishes contact between founders and lenders and arranges the loan. The platforms take on even more services. You sort the loan requests by checking the creditworthiness of the applicants in advance via a credit bureau query and then grouping them into different risk classes. The loan will not be paid until the previously agreed amount has been raised. Borrowing on crowdlending is an excellent alternative to bank loans, be it because the young entrepreneur does not get credit or does not want to be unilaterally dependent on a lender.

Business start-ups should take a close look at the crowdlending portals as to which platform suits their project best. In addition, the founder must be ready to present his business idea to a broad public, without fear of potential imitators and competitors. The application for the start-up project is free of charge, while a successful payment of the loan amount, a commission is due. It is therefore advisable to have a previous cost comparison.

The advantage of crowdfunding for business start-ups is that no collateral or business plan is required for the loan application. The pre-selection of platforms eliminates far fewer start-up projects than with a financial institution. Only multiple and strong negative entries at credit bureau, such as foreclosure and ongoing redevelopment or economically unsustainable ideas, are sorted out. Although the funding campaign requires a lot of time and perseverance, it can also be used very well as a marketing measure. The disadvantage is that the interest rates for swarm loans are higher than for promotional loans. Credit periods are short and amortization must be paid on time from the first month. With low capital requirements Crowdlending is well suited for small and sideline start-ups as well as sole traders.

personal loans

personal loans

These are loans from relatives and acquaintances. These can be used when it comes to small sums, interest should be saved or the founder has a bad credit rating. Even if the relationship is good and based on trust for many years, there should be clear written rules on terms and repayment of the loan so that any subsequent disputes in the family are excluded.


Today, a start-up entrepreneur no longer relies solely on the judgment of his bank to finance the founding of a company. Subsidized loans and swarm financing via the Internet are complementary or alternatively favorable financing channels. Without conventional credit institutions, borrowed funds can be taken in more easily and, above all, faster because they are less bureaucratic. However, not every form of financing makes sense for every potential entrepreneur.

Start-ups should first consider all forms of financing and assess their impact on their own business model. For larger start-ups, we recommend a mix of equity and debt as well as bank and alternative financing. The funding must fit the concept of the founder. He should consider all opportunities and risks of the credit type in his financial planning as far as possible.

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