Start-Up Financing 2026: The 17 Most Important Answers

What Is Start-Up Financing?

Start-up financing means covering the capital requirements of a business start-up: through equity, development loans, guarantees, equity investments, and grants. The goal is to finance investments and start-up costs until the business can sustain itself.

It is usually a mix of several building blocks. Which combination fits depends on the project, the industry, capital requirements, and your starting position.

What Financing Options Are There for Founders?

The most important building blocks are: equity, the KfW start-up loan (StartGeld 067 and ERP development loan 077), programs of the state development banks, guarantees from the guarantee bank, equity capital, and non-repayable grants such as the start-up grant (Gründungszuschuss).

Loans must be repaid, grants do not. In practice they are combined: for example, the start-up grant for living costs plus KfW StartGeld for the investments.

What Is the KfW Start-Up Loan?

The KfW start-up loan is a low-interest development loan from the state-owned KfW for start-ups and young businesses. The two main programs are the ERP Start-up Loan – StartGeld (067) and the ERP development loan for founding and succession (077).

The loan is not applied for directly at KfW but through your house bank (house bank principle, Hausbankprinzip).

What Is KfW StartGeld (067)?

The ERP Start-up Loan – StartGeld (067) is KfW’s entry-level program: loans of up to €200,000 (of which up to €80,000 working capital), with an 80% liability exemption (Haftungsfreistellung) for the house bank and no mandatory equity.

It is aimed at founders as well as small businesses and freelancers that have been on the market for less than five years, also as a side business.

What Is the ERP Development Loan for Founding and Succession (077)?

The ERP development loan for founding and succession (077) is the larger KfW program for start-ups, takeovers, and consolidations with higher capital requirements that go beyond StartGeld.

It is suitable if you need more than €200,000 or are financing a business succession.

Can I Start a Business Without Equity?

Yes, that is possible, above all through KfW StartGeld, which does not necessarily require equity, and through guarantees if collateral is missing. Some equity, however, significantly improves terms and the likelihood of approval.

More on this on our detail page “Starting a business without equity”.

How Does the House Bank Principle Work?

You do not apply for development loans like those from KfW directly at the development bank, but through your house bank: it reviews your project, passes it on, and grants the loan. The house bank is therefore your first point of contact.

Note: We are start-up consultants. We prepare your application to be bankable and accompany you to the bank meeting, but we are not a bank or a lender ourselves.

What If I Lack Collateral?

Then the guarantee bank of your federal state helps: with a default guarantee (Ausfallbürgschaft), it covers up to 80% of the credit risk, so that the house bank can finance despite missing collateral.

Without a house bank, the “Bürgschaft ohne Bank” (BoB) program also makes a guarantee possible directly; the maximum amount is set by the guarantee bank of the respective federal state.

How Do I Calculate My Capital Requirements?

Add up all investments (e.g., equipment, inventory) plus ongoing costs and your personal living costs for the start-up phase until the business sustains itself, plus a liquidity buffer for the unforeseen.

The plan for capital requirements and liquidity is part of your financial plan and determines how large your financing needs to be.

What Is the Difference Between a Grant and a Loan?

A loan (e.g., KfW StartGeld) must be repaid with interest, a grant (e.g., the start-up grant) does not. Both can be combined: the grant often secures living costs, the loan the investments.

Which Grants Are Available for Starting a Business?

The most important non-repayable grants are the start-up grant (§ 93 SGB III, for recipients of unemployment benefit I, ALG I), the entry allowance (Einstiegsgeld, § 16b SGB II, for recipients of basic income support; Grundsicherungsgeld, formerly Bürgergeld), BAFA consulting funding, and, for innovative start-ups, the INVEST grant.

Which grants are open to you depends on your starting position. Our funding check gives you quick orientation.

What Is Equity Capital and When Does It Fit?

Equity capital is genuine external equity: business angels, venture capital funds, or public equity investment companies (MBG) invest in exchange for shares in your company. It suits growth-oriented, capital-intensive, or innovative start-ups that cannot be financed through loans alone.

For innovative start-ups, the INVEST grant additionally subsidizes private investments and makes an equity stake more attractive for investors.

What Is a Microloan and When Is It Worthwhile?

A microloan is a small loan for low capital requirements, useful for micro start-ups and side-business start-ups for which a conventional bank loan is too large or unavailable due to a lack of collateral. In NRW there is the NRW.Mikrodarlehen for this (up to €50,000, no collateral, through the STARTERCENTER NRW).

Crowdfunding can additionally finance an idea and at the same time test the market before you tie up larger funds.

What Regional Start-Up Funding Is Available (for Example in NRW)?

In addition to nationwide KfW, every federal state provides funding through its state development bank: in NRW the NRW.BANK, in Bavaria the LfA, in Baden-Württemberg the L-Bank, in Berlin the IBB. Each federal state also has its own guarantee bank.

We review together in the initial consultation which regional funding is best for your location.

How Do I Prepare for the Bank Meeting?

With a bankable business plan including a reliable financial plan and liquidity plan, clear numbers, and answers to the typical bank questions (debt service capacity, collateral, plan B). Confidence comes from preparation.

Many applications fail not because of the idea, but because of incomplete or unrealistic documents.

What Does Start-Up Financing Cost?

The interest rates on development loans are lower than on conventional bank loans and depend on the program, the term, your creditworthiness, and the collateral situation (risk-based interest system). KfW states current terms on a daily basis.

Because the terms change continually, always check the current status directly with KfW or your house bank.

What If the Financing Is Rejected?

A rejection is not the end of the road: documents can often be improved, a guarantee added, or a different program or another house bank chosen. What matters is understanding the reason for the rejection precisely.

We analyze the reason with you and prepare a viable second attempt.

Programs Compared: KfW, State Development Bank & Bank Loan

Which program fits? The most important differences at a glance. In practice they can often be combined.

Tip: Calculate your needs with the capital requirements calculator and the later burden with the KfW repayment calculator.

Example: Financing Mix for a Start-Up

Equity: what KfW requires and what the house bank expects

For most programs (for example StartGeld 067 or the ERP development loan for SMEs), KfW requires no minimum equity; formally, up to 100% of the costs can be financed. However, because the loan runs through your house bank and the house bank shares the risk, the bank in practice usually expects 10–20% own funds before it commits. Equity improves creditworthiness, terms, and the likelihood of approval.

Exception for takeovers and succession: Here the equity ratio is often less decisive, because the running business with its cash flow and assets serves as collateral. We prepare your application in such a way that the house bank goes along with it.

We check external links to official bodies each time this page is updated (see the date above). Content and terms may change; the source itself is always authoritative.