You already know how much money you will need to set up your business? Now is the time to raise the necessary capital. The Platform for Founders has an overview of options for this endeavour.
Equity and bank loans
In financing, there is generally made a distinction between equity and borrowed capital. Your equity is the financial cornerstone of your business. It includes your personal assets (e.g. cash and savings) and objects that become part of your business (e.g. machinery and equipment).
Generally, this means that the more funds you raise on your own have, the more independent you are. For banks, equity serves as security. Ideally, equity should amount to at least 20 percent of your overall capital. Surveys indicate that “insufficient securities” and “too little equity” are the most common reasons why banks reject a loan application.
You can obtain loans from a regular bank or a savings bank (Sparkasse). The type of bank and loan best suited for your business depends on the amount of money you need, as well as how long you will need it for. You could find a suitable financial institution on the Gründerplattform.
In general, the longer the loan period and the higher the risk (assessed by your bank), the higher the interest you will have to pay for the loan. It is therefore important that you convince the bank of your plans with a well-developed business plan. It is also crucial that you have sufficient equity.