Funding For Craftsmen: Cheaper For Financing
New tools, pre-financing resources, new vehicles: Craftsmen often need fresh means to stay competitive. Subsidies are available with favorable conditions.
The benefits of funding with grants
Grants are a cheap solution for craft businesses to finance. They are usually not only cheaper than a loan through a bank or the regular use of current account credit, but also offer off the interest rate good conditions – often include lower collateral requirements and grace periods with the funding program. This means that in the first months only the interest must be paid, while the actual repayment takes place later, for example, according to the incoming payments of customers.
Suitable support programs for craftsmen
In Germany, there are more than 1,700 support programs that companies can use – but not all are also suitable for craft businesses. Depending on the project, craftsmen should be careful to use the right funding program for the right investment.
Financing the operation
The Kreditanstalt für Wiederaufbau (KfW for short) is the largest development bank in Germany and offers a variety of financing solutions for companies that are also suitable for craft businesses – such as the KfW Entrepreneur Loan . This actively promotes the purchase of machinery, tools, vehicles and operating equipment. Equipment or the construction of a warehouse can often be financed more cheaply with KfW’s business loans.
In addition to the nationwide funding programs, regional promotional banks also offer solutions that companies in a particular federal state can use. In North Rhine-Westphalia, NRW.BANK supports the local companies as a promotional bank – for example with the NRW.BANK.Mittelstandskredit or NRW.BANK.Universalkredit. In Berlin, the Investitionsbank Berlin (IBB) offers the Berlin loan for entrepreneurs. Smaller sums up to 25,000 euros can also be financed there with the IBB microcredit . Each federal state has its own development bank, which is responsible for subsidies in its region.
In addition to development loans, craftsmen can also take advantage of subsidies for training. For professional qualification – for example, to obtain a master’s title – craftsmen can use the so-called “promotion BAföG” of the Federal Ministry of Education and Research. For example, the ministry promotes further education as a master, specialist, technician or business economist with up to 15,000 euros. This support can be obtained through the helpdesk services of the Ministry.
Finance the takeover of the craft business
For many craft businesses, a transfer or succession plan will be available in the coming years. As a deserving craftsman who has built up his own business for many years, one usually wants to hand this over to the right hands. Frequently, this handover fails because of the purchase price, which the buyer – often an employee of his own company – can not afford. Especially for these cases, KfW offers ERP capital for start-ups at particularly favorable terms – a promotion that makes many takeovers possible in the first place.
The path to promotion for craft businesses
Promotional banks work in most cases according to the transit principle. This means that tradespeople who want to use subsidies can not directly request support from a promotional bank, but that the path through a commercial bank must always be chosen. Since funding through promotional programs for commercial banks, such as the house bank, is less profitable than “normal” financing such as loans, many financial services providers tend to support subsidized funding rather negligently. The search for a provider that supports a craft business on the way to a promotional loan is therefore often difficult.
Financial platforms are often a good alternative: Craftsmen can attract so many financial providers collected – the chance of financing with a matching funding program and favorable conditions increases.