Starting your own business requires not only a lot of time and ambition, but also requires some starting capital at the beginning. To finance the start in the young entrepreneur, you can take out a loan. The path to self-employment can even be subsidized by the state with special micro credits.
When is a young entrepreneur?
Whether you are a young entrepreneur does not depend on your age. Nevertheless, some other criteria must be met.
On the one hand, you must never have been self-employed or have been self-employed for the past five years, and you must also have completed your non-self-employment, that is the existing employment relationship, and you must not pursue any additional employment.
In addition, the foundation or takeover of a company may not be more than three years after the submission of the subsidy application. If a company is taken over, you have to be at least 50 percent owner.
Where can I apply for the start-up loan?
Before you apply for a young entrepreneur credit, you should make an appointment with the house bank. In order to be able to argue well in this negotiation, some preliminary work must be done. It is best to compare yourself in advance with the offers conceived for young entrepreneurs and also with other banks.
You can tell a good bank adviser that he is on hand with words and deeds. However, this also means that he offers the assessment of the concept during the initial consultation and also helps to prepare a business plan. He also goes through the options of financing the project step by step and also constructively criticizes the project.
However, one should not take the criticism personally, but one should take the concerns of the consultant seriously, since he has many years of experience in the field.
The financing options
The credit for young entrepreneurs is characterized by the fact that he has relatively low interest rates and fair conditions. The loan is tailored to the individual ideas of the young entrepreneur and should be a kind of jump start.
As a rule, a loan from the ERP is offered by the bank. A grant from the European Recovery Program makes it possible to borrow up to 75,000 euros without having to show any collateral, which is quite problematic for start-ups. However, it should be remembered that the personal liability of the company continues to exist. If the bank now wants a security, young entrepreneurs can take a so-called deficiency guarantee.
Under normal circumstances, the repayment eligibility for an ERP loan is around seven years. So there is enough time to get your business up and running. But whether you need the money for investment, start-up or growth, you always have to specify the purpose for the loan. For example, a so-called ERP microcredit only supports investments. In investment must cost at least 20,000 euros and a maximum of 100,000 euros, so that then could be funded with up to five percent.
Thoughts on what to do when borrowing
First, of course, you should be clear how much money is needed in the first place. This is always dependent on the business idea. Then you should know that in the best of a clean credit bureau information should have. Only then can the bank be sure that it will get its money back later. And to convince the bank of the business idea, you should have a good business plan at hand. Because bank love concrete numbers.
5 tips for young entrepreneur loans
1. The business idea
First, there should be the development of a good business idea for the loan. Young entrepreneurs who want to develop a good idea should recognize and use the appropriate market gaps. The prospective entrepreneur should have in mind his product or service as well as the target group to be addressed. Good profit can only be made if the company sets itself apart from its many competitors.
Therefore, it is very important to build something individual. So, before applying for the loan for young entrepreneurs, a concept should be in place and everything important should be clarified in advance. An idea alone is not enough. Therefore, we come to the second tip.
2. The business plan
Creating a business plan is very important and shows professionalism when applying for the loan. So is the idea and a good concept exists, so it can be used. All this is included in the so-called business plan. He should present the future company in a structured way. What should not be missing in a business plan is first and foremost the idea of the new young entrepreneur.
Then of course a good concept for the existing idea has to be shown. Furthermore, marketing strategies should be developed and the required capital calculated. This also requires a financing plan. And, of course, you should also calculate what profits the company should make.
3. Ongoing costs
Another tip is not to lose sight of private running costs. Because these too must be covered. There are also special subsidies and financing for young entrepreneurs. As soon as your own company is founded out of unemployment, there is the so-called start-up subsidy as an aid from the employment office. However, this can only be claimed if the founding of the company is a full-time job.
The employment office also needs a business plan to determine if the company is economically viable. This grant helps the young entrepreneur for nine months and is calculated by the employment office on the basis of the last money received. Reserves should always be created. It is not always the same to expect big profits when a company is being built.
4. The marketing strategy
A good marketing strategy is also helpful for young new companies. It is important to make the target group aware of the company. For the marketing strategy also a budget is to be planned. A good internet presence draws attention and introduces the company. This should necessarily be created professionally. But only one internet platform is not enough.
The goals must be planned precisely and marketed accordingly. The product or service should be advertised attractively. Also the company characteristic as well as the difference to the competition must be clear to the target group. Marketing includes, for example, radio and television advertisements as well as flyers or magazine advertisements.
5. Act in a planned manner
Good organization must also not be neglected. Especially in the beginning of a young company everything should be structured and arranged exactly. Everything has to be well calculated right from the start. To accomplish tasks and thus forget nothing, the creation of a plan is very helpful. This includes all the important items and tasks that need to be done.
Thus, the administration is organized and nothing can go down. Using specially created plans, young entrepreneurs are better at seeing whether everything is going well or that improvements are needed at certain points. If all the tips are observed and implemented and a good business plan is in place, there should be nothing in the way of a start-up loan.