Tax-free funding under §§ 93, 94 SGB III
Start-Up Grant 2026 From the Employment Agency
per month, for up to 15 months
in two phases
no repayment
Reviewed by Pavel Deuble
Start-up consultant & BAFA-registered business consultant
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The Most Important Points in Brief
The start-up grant (Gründungszuschuss) supports recipients of unemployment benefit I (Arbeitslosengeld I, ALG I) in starting self-employment as a main occupation: for six months your previous ALG I plus €300 per month, then, on a new application, up to nine more months of €300 (§§ 93, 94 SGB III). A requirement is at least 150 days of remaining entitlement at the time of founding; approval is a discretionary decision (Ermessensentscheidung) of the Employment Agency (Agentur für Arbeit).
Quick Answers
Who gets the start-up grant?
You can receive the start-up grant from the Employment Agency (colloquially: the start-up grant from the “Arbeitsamt”) if you receive unemployment benefit I, still have at least 150 days of remaining entitlement when you start self-employment, start a business as your main occupation with at least 15 hours per week, and prove viability with an expert opinion (fachkundige Stellungnahme; § 93 SGB III). It is a discretionary benefit (Ermessensleistung): the Agency decides case by case.
How high is the start-up grant from the Employment Agency?
Unemployment benefit I plus €300 per month for six months, then, on a new application, €300 for up to nine months (§ 94 SGB III). With €1,500 in unemployment benefit, that comes to around €13,500 over 15 months, and with €2,000 around €16,500. The grant is tax-free and does not have to be repaid; phase 2 requires proof of activity as a main occupation.
How do I get the start-up grant from the Employment Agency?
Five steps: check your remaining entitlement to unemployment benefit I (at least 150 days still left at founding), back your business idea with numbers, write the business plan including the financial plan, obtain an expert opinion from the Chamber of Commerce and Industry (IHK), the Chamber of Crafts, a trade association, or a credit institution, and submit the application to your Employment Agency before you start self-employment. The decision usually takes four to six weeks. Process, forms, and deadlines: applying for the start-up grant.
Is there an application form for the start-up grant?
Yes. You submit the application online in the portal of the Federal Employment Agency (Bundesagentur für Arbeit) or with your Employment Agency’s form, as soon as your plan has been registered with your placement specialist. Attachments: business plan with financial plan, résumé with proof of qualifications, and the expert opinion. Submit everything before you start the self-employed activity; after that, funding is generally no longer available (§ 324 SGB III).
On this page
Sound Familiar?
The deadline is pressing and you do not know how much time you have left
At least 150 days of remaining entitlement to unemployment benefit I must still exist when you start the self-employed activity. Anyone who starts the business first and only then applies generally no longer receives the funding (§ 324 para. 1 SGB III).
You are supposed to prove viability and nobody tells you what is enough
The expert opinion comes from the IHK, Chamber of Crafts, trade association, or credit institution. No information sheet states which documents the body wants to see for it.
You read “discretionary benefit” and do not know what you can influence
There is no legal entitlement to the start-up grant; the Agency decides at its discretion. The only things you can influence are your documents: business plan, financial plan, opinion.
What Is the Start-Up Grant?
The start-up grant is tax-free funding from the Employment Agency under §§ 93, 94 SGB III that gives ALG I recipients financial security as they take the step into self-employment. It does not have to be repaid, but it is a discretionary benefit, not a legal entitlement.
The aim is to secure living expenses and social security in the start-up phase, as long as the young company is not yet generating sufficient income. Because the Agency decides at its discretion, a viable business plan and a convincing expert opinion are the key to approval, which is why many founders have their business plan created.
How High Is the Start-Up Grant?
In phase 1 (6 months), you receive your last ALG I rate plus €300 per month; in phase 2 (up to 9 more months), only the €300. Over 15 months, this adds up, depending on the ALG I amount, to around €13,500 to roughly €20,000.
The amount depends on your personal ALG I rate and is paid in two phases:
| Phase | Duration | Funding / month |
|---|---|---|
| Phase 1 | 6 months | ALG I rate + €300 flat rate |
| Phase 2 (on application) | up to 9 months | €300 flat rate |
Example calculation: with €1,500 in ALG I, you get around €13,500 over 15 months, and with €2,000 around €16,500. The €300 flat rate is intended for your social insurance and is paid in phase 2 only on a new application with proof of activity.
Start-up grant calculator
Estimate in 30 seconds how much start-up grant you could receive over 15 months.
Basis: § 93 / § 94 SGB III. The start-up grant is a discretionary benefit; there is no legal entitlement. Requirements include: at least 150 days of remaining ALG I entitlement when you start self-employment, viable self-employment as your main occupation, and an expert opinion. Non-binding estimate, does not replace advice. Calculation values according to §§ 93, 94 SGB III, as of 2026.
What Requirements Apply?
You must receive unemployment benefit I, still have at least 150 days of remaining entitlement at the time of founding, start a business as your main occupation (≥ 15 h/week), and prove viability with an expert opinion.
- Receipt of unemployment benefit I (not basic income support / ALG II)
- At least 150 days of ALG I entitlement still remaining when you start self-employment
- Self-employment as your main occupation (at least 15 hours/week)
- Personal and professional suitability
- Viable business plan with a reliable financial plan
- Expert opinion from a qualified body (fachkundige Stelle)
Under § 93 para. 2 SGB III, qualified bodies include in particular chambers of commerce and industry, chambers of crafts, professional chambers, trade associations, and credit institutions. We prepare your documents so that the qualified body can confirm viability. All details in our guide on the viability certificate (Tragfähigkeitsbescheinigung).
Basic income support (Grundsicherungsgeld) / ALG II? Then the start-up grant is not possible. Instead, the entry allowance (Einstiegsgeld) under § 16b SGB II from the Jobcenter may be an option (up to 24 months). AVGS coaching (through the Activation and Placement Voucher, Aktivierungs- und Vermittlungsgutschein) can be used independently of this. You can read here whether a start-up grant without unemployment is possible.
How Do I Apply for the Start-Up Grant?
You will find the complete process, including forms and deadlines, on our page about applying for the start-up grant.
Preparing the Application Alone or With Us
| Preparing it yourself | With Unternehmenswerk |
|---|---|
| You check yourself whether at least 150 days of remaining entitlement to unemployment benefit I still exist when you start the self-employed activity. | We work through the remaining entitlement with you and set the founding date so that the application is on file beforehand. |
| You prepare the business plan and financial plan alongside a job or job search, usually over several weeks. | You provide your numbers and your concept; we write the plan and calculate capital requirements, liquidity, and profitability. |
| You look for a qualified body yourself and ask which documents it wants to see. | We prepare your documents so that the qualified body can review viability, and we accompany you to the appointment. |
| You sort forms, supporting documents, and attachments yourself and hope you have not forgotten anything. | You receive a complete application folder with a checklist and only need to approve it. |
| When the Employment Agency has follow-up questions, you answer without benchmarks from other cases. | When there are follow-up questions, we draft the supplementary submission with you until the case handler has everything they need. |
The start-up grant is a discretionary benefit under § 93 SGB III. The Employment Agency decides on approval.
The 6 Most Common Mistakes in the Start-Up Grant Application
Most rejections have the same causes: unclear requirements, a weak business plan, and unrealistic financial planning. If you know them, you can avoid them.
Unclear requirements
Many people do not know which conditions must be met, for example 150 days of remaining ALG I entitlement at founding.
Mistakes in the business plan
An unstructured or incomplete business plan is the most common reason for rejection.
Unrealistic financial planning
Overly optimistic revenue or forgotten costs raise doubts about viability.
Missing documents
Missing supporting documents needlessly delay the application.
No clear structure
The requirements of the Employment Agency overwhelm many founders.
Time pressure from the ALG I entitlement
The application must be submitted in good time before you start self-employment.
You can read in detail how to avoid each of these mistakes under Start-up grant: avoiding the 7 most common mistakes.
Funding From a Single Source: AVGS Before Founding, BAFA Afterward
With us, funding comes from a single source: before founding, AVGS start-up coaching that is 100% funded after written approval; at the start, the start-up grant; and after founding, BAFA-funded business consulting. All with the same consultant, without switching providers.
Before founding
AVGS start-up coaching
Business plan, financial plan, and expert preparation, 100% funded through the Activation and Placement Voucher (AVGS) after written approval.
At the start
Start-up grant
Tax-free start-up aid from the Employment Agency for your living expenses in the first 15 months.
After founding
BAFA consulting
A 50% to 80% grant toward business consulting for companies already active on the market, for growth and stabilization.
Most providers do not offer this continuous support from a single source. At the end of the coaching, you also receive a certificate of participation for the content you completed, which documents your preparation.
Official Sources, Information Sheets & Flyers
The authoritative primary sources to read up on: information sheets and program pages of the responsible funding bodies, as well as the relevant legal texts.
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.
Related service
Entry allowance: start-up funding from basic income support
If you receive basic income support (Grundsicherungsgeld, formerly Bürgergeld), you do not qualify for the start-up grant (Gründungszuschuss), but you can qualify for the entry allowance (Einstiegsgeld) under § 16b SGB II. We will check with you which route is open to you.
Everything About the Application in Detail
Dive deeper into the individual aspects: from the process through the most common mistakes to the complete document checklist.
Start-up grant in your city
Founders We Have Supported With the Start-Up Grant
Everyday support services · Cologne
Hardly any prior business knowledge, uncertainty about the business plan and financial planning. Together we developed a clear structure and taught the basics of financial management.
“Thanks to the coaching, I now have a solid grasp of the basics of financial management.”
Organic and natural food store · Fritzlar
After a job loss, the takeover of a store, with uncertainty about financing, business plan, and start-up grant. We created the business plan and successfully supported the application.
“Thanks to the help of Mr. Deuble and his team, I felt ready to take the step.”
IT consulting · Bremen
A long-time IT specialist with no experience in business plans and funding. We developed a professional business plan and prepared all documents for the Employment Agency.
“The professional support and fast communication were decisive.”
Video testimonials
First-Hand Experiences
See how founders experienced the path to funded self-employment, with real names and verifiable on request.
4.9 / 5 · 65 Google reviews
In 30 minutes we answer all your questions, free of charge and without obligation.
AVGS, Start-Up Grant, or Entry Allowance: The Three Funding Routes Compared
| AVGS | Start-up grant | Entry allowance | |
|---|---|---|---|
| Purpose | Start-up coaching before founding: business plan, financial plan, preparation for the conversation with the Agency | Living expenses and social security after founding | Grant in addition to basic income support when starting self-employment as a main occupation |
| Legal basis | § 45 SGB III | §§ 93, 94 SGB III | § 16b SGB II |
| Who | Recipients of unemployment benefit I or basic income support to whom the Agency or the Jobcenter issues the voucher | Receipt of unemployment benefit I, at least 150 days of remaining entitlement at founding, main occupation with at least 15 hours per week, expert opinion | Employable benefit recipients in basic income support (formerly Bürgergeld) |
| Benefit | The coaching is paid directly to the approved provider; after written approval, your personal contribution is €0 | Unemployment benefit I plus €300 per month for six months, then €300 per month for up to nine months on a new application | Grant in addition to basic income support, amount at the discretion of the Jobcenter, for up to 24 months |
| Timing | Before founding | Application before starting the activity, payment from the founding date | Apply before starting the activity |
| Responsible body | Employment Agency or Jobcenter; provider: UW Unternehmensweg GmbH (AZAV provider approval Z-000392-2, program BusinessWeg Z-000482-2) | Employment Agency | Jobcenter |
| Combinable | With the start-up grant: coaching first, then application | With the AVGS beforehand; not with the entry allowance | With the AVGS beforehand; not with the start-up grant |
All three are discretionary benefits; there is no legal entitlement. Which route is open to you depends on whether you receive unemployment benefit I or basic income support (formerly Bürgergeld).
Frequently Asked Questions About the Start-Up Grant
What is the start-up grant?
The start-up grant is funding from the Federal Employment Agency under §§ 93, 94 SGB III. It supports ALG I recipients as they take the step into self-employment. The grant is tax-free (§ 3 no. 2a EStG) and does not have to be repaid. However, it is not a legal entitlement but a discretionary benefit.
How high is the start-up grant?
In phase 1 (6 months), you receive your previous ALG I rate plus a €300 social insurance flat rate per month (§ 94 para. 1 SGB III). In phase 2 (up to 9 more months, on a new application), only the €300 per month (§ 94 para. 2 SGB III). With €1,500 in ALG I, that comes to around €13,500 over 15 months, with €2,000 around €16,500, and at most about €20,000.
Do I have a legal entitlement to the start-up grant?
No. The start-up grant is a discretionary benefit: the Employment Agency decides case by case (§ 93 para. 1 SGB III). This is exactly why a convincing business plan and a well-founded expert opinion are so decisive.
Can I get the start-up grant without unemployment?
As a rule, no: the requirement is a remaining entitlement to unemployment benefit I of at least 150 days (§ 93 para. 2 no. 1 SGB III). Without receiving ALG I, the start-up grant is ruled out. You can read about when a short period of unemployment makes sense as a bridge, and which mistakes you must avoid in doing so, under “Start-up grant without unemployment & 7 mistakes.”
What happens after the first 6 months?
Phase 2 is not paid automatically. You must apply for it again and use suitable documents to show that your self-employment is run as your main occupation and on a sustainable basis (§ 94 para. 2 SGB III). Then you continue to receive the €300 flat rate for up to 9 months.
Can I get the start-up grant while receiving basic income support?
No, the start-up grant is exclusively for ALG I recipients. Anyone receiving basic income support (ALG II) can apply to the Jobcenter for the entry allowance under § 16b SGB II (up to 24 months). AVGS coaching is possible independently of this.
Do I have to pay tax on the start-up grant or repay it?
No. The start-up grant is tax-free (§ 3 no. 2a EStG) and does not have to be repaid. It is also not subject to the progression clause (Progressionsvorbehalt); unlike unemployment benefit itself, it does not raise your tax rate.
How long does the application process take?
From submitting the application to the decision, typically 4–6 weeks, or 8–12 weeks if there are follow-up questions. Because preparation takes 4–8 weeks, you should start with 8–12 weeks of lead time.
What is the difference between the AVGS and the start-up grant?
The AVGS and the start-up grant are different funding instruments. The AVGS (§ 45 SGB III) pays an approved provider for start-up coaching before founding. The start-up grant (§§ 93, 94 SGB III) secures your living expenses after founding: unemployment benefit I plus €300 for six months, then, on a new application, €300 for up to nine months. Both are discretionary benefits and can be used one after the other.
Do freelancers get the start-up grant?
Yes. § 93 SGB III does not distinguish between a commercial business and a freelance profession; what matters are receipt of unemployment benefit I, at least 150 days of remaining entitlement at founding, and work as your main occupation for at least 15 hours per week. For freelancers, the expert opinion is usually issued by the professional chamber, a trade association, or a credit institution. Here too, the Agency decides at its discretion.
How am I covered by health insurance during the start-up grant?
When you start self-employment, your insurance through the Employment Agency ends. You insure yourself: voluntarily in statutory health insurance if you join within three months (§ 9 SGB V), or privately. Under § 94 SGB III, the €300 per month is intended for this coverage. Pension insurance is voluntary for most self-employed people.
What happens in the case of a suspension period?
A suspension period (Sperrzeit, § 159 SGB III) lasts up to twelve weeks. During that time there is no unemployment benefit I; the total entitlement is reduced by the days of the suspension period, by at least a quarter if it lasts twelve weeks (§ 148 SGB III). For the start-up grant, what counts is the remaining entitlement at founding: at least 150 days even after a suspension period. Plan how you leave your job with your Agency in advance.
What can I do if the application is rejected?
You can file a written appeal (Widerspruch) against the decision within one month of receipt (§ 84 SGG). Check the reasons given: usually, proof of viability is missing or the expert opinion is too brief. As long as you have not yet founded and 150 days of remaining entitlement still exist at founding, an improved application is possible. There is no legal entitlement. More: Start-up grant rejected: what now?
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About the author
Pavel Deuble
Start-up consultant & BAFA-registered business consultant · Owner of Unternehmenswerk
Pavel Deuble is the owner of unternehmenswerk and managing director of UW Unternehmensweg GmbH. He is listed in the BAFA register of consultants (consultant ID 191790); the AVGS programs run through the AZAV-certified UW Unternehmensweg GmbH (provider approval Z-000392-2). Since 2018 more than 750 business plans, 4.88 out of 5 on ProvenExpert from 92 reviews.