Start-up grant – State aid for business start-ups

Anyone who wants to become self-employed out of unemployment and start a business can apply for a start-up loan. This is a so-called transfer payment, which is paid by the Employment Agency. Every year more than 200,000 jobseekers use the start-up grant to earn their own living. However, to qualify for the grant, some conditions must be met. However, there is no right to a start-up grant. He will be granted or refused on application. Here you will learn everything important about the start-up grant of the Employment Agency!

What offers me a start-up grant?

What offers me a start-up grant?

If the start-up grant is granted, the grant will be split into two phases. First, you get the so-called “basic funding” for six months. This is a payment equal to the last paid unemployment benefit. In addition, you will receive a monthly fee of 300 euros. This serves for your social security.

After the end of the first half year, the funding can be extended upon application. If you continue to be self-employed and start earning your living full-time, the subsidy amounting to 300 euros per month can still be granted. In order for this start-up grant to be maintained, the employment agency usually requires a business plan to assess whether your project has prospects of success and is on solid financial footing.

Startup grant Requirements – what do I have to bring?

Startup grant Requirements - what do I have to bring?

The start-up grant from the Employment Agency is not available to everyone. You must meet the following requirements so that your start-up is subsidized by the state.

  • You have to be unemployed: In this case, unemployment benefits you because you can get a start-up grant for your self-employment. In this case, a claim to unemployment benefit I (ALG I) must exist for at least 150 days. If you have quit your old job yourself, there is a lock-up period of three months that you must comply with. You can submit your application, but you will not receive any support until the blocking period has expired.
  • You have to work as a self-employed person for at least 15 hours per week: The Employment Agency wants to lead you out of unemployment. Therefore, you should also work more than just part-time to get start-up grant.
  • You have to prove your knowledge and skills: The Employment Agency wants to make sure that you can do what you want to do for a living. If you can not prove your knowledge directly, the employment agency will ask you for support measures so that you receive the start-up subsidy.
  • Someone needs to comment on your project: In order for your business to be successful, the project should be evaluated by a professional body. Such a statement can be provided by the responsible IHK, Handwerksammer or a trade association. You then need this to get your start-up grant approved.
  • You must be younger than 65 years of age: From the age of 65, you have reached retirement age. From this age limit, start-up grants will no longer be granted.
  • You can not find a job in your old job market: If you can prove that you do not have an adequate new job, chances are you’ll get a start-up grant.

If you take this checklist into account, all prerequisites are met as part of your application for the start-up grant.

You must observe this when applying for a start-up grant

You must observe this when applying for a start-up grant

If you apply for a start-up grant, you must provide different information about yourself. For this purpose, a separate application form is provided by the Employment Agency. In addition, you must supply additional documents:

  • Description of your project and a concept for the foundation
  • Detailed CV
  • Cost accounting with private expenses and for the standard of living
  • Preview of revenue and profitability for the next three years
  • Financing plan and capital requirements plan for the next three years
  • Plan about your liquidity
  • Business registration at the Gewerbeamt
  • Notification of self-employment with the tax office
  • Certification of the feasibility of your project by an expert (IHK, professional association, etc.)

Recommendation:

Get advice from an expert when setting up a business plan. This increases your chances of getting a start-up grant.

Do I have to pay tax on the start-up subsidy?

Do I have to pay tax on the start-up subsidy?

You do not have to pay tax on the start-up subsidy. In principle, any start-up subsidy is tax-free, as stipulated in §3 of the Income Tax Act. The start-up subsidy is not a replacement wage. Therefore, this does not have to be listed in the tax return. You only have to pay tax on the income from your self-employment.

Start-up grant extension – is this possible?

If the basic funding, ie the payment of the last unemployment benefit over half a year, has expired, you can apply for a start-up grant extension. This is a total of 2,700 euros, because the Employment Agency can grant you 300 euros a month for nine more months.

The condition for receiving the further grant is that you can make a living from your own resources. The 300 euros serve then for further protection. You also do not have to pay any taxes and the amount is not taken into account for the calculation of the contributions from health and long-term care insurance. You can submit your application for a start-up grant extension at the earliest two months before the end of the basic grant.

Start-up subsidy and social security benefits

Start-up subsidy and social security benefits

If you receive start-up subsidy, you are no longer covered by the employment agency. That’s why you have to take care of yourself now.

Health insurance: As a self-employed person you do not automatically enjoy the protection of the statutory health insurance (SHI). Be sure to check whether voluntary statutory health insurance or private health insurance makes sense for you. The SHI may in some cases be more expensive because it starts with a fictitious monthly income and measures the contribution to it.

Unemployment insurance: If you become self-employed after at least five months of ALG I, you are no longer entitled to the statutory unemployment insurance.

Pension insurance: As a self-employed person, you can generally decide freely how to protect yourself in old age. However, you must pay attention to compulsory insurance in some professions, this includes, for example, freelancers such as publicists or artists.

How can I still receive funding for reasons?

How can I still receive funding for reasons?

If your application for a founding grant is rejected, you can take advantage of additional funding opportunities. This includes, for example, the so-called “entry fee”. Also possible are programs of the Intrasavings bank for founders or promotional banks of the respective federal states.

If you have an idea, you can also contact private sponsors, such as the business angels in the respective city. However, it is also important here that you can use a business plan to show how you can exactly imagine your company in the future.

What to do if the start-up subsidy is rejected?

What to do if the start-up subsidy is rejected?

It may happen that an application for a start-up grant is rejected. In that case, you usually have to wait 24 months to apply again. However, if your project has failed because you are seriously ill, you can re-apply for a start-up grant without waiting.

Important:

If you become unemployed after the failure of your company, your entitlement to unemployment benefits will be reduced by the days you receive a start-up grant. As a rule, you have hardly any claim to unemployment benefits.

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