Starting a Business in Berlin

72 73 Starting a Business in Berlin A Beginner’s Guide How to set up a promotion loan A business plan is submitted to the bank complete with the necessary documenta- tion The bank checks the paper- work in a face-to-face discussion and files an application with the promotio- nal bank, if necessary Promoti- onal bank checks the application and makes a decision The applicant and bank conclude a credit agreement, with money paid out in tranches Provide proof of investments made vis-à- vis the bank Minimum requirements for public promotional loans ls Basic requirement is a promising concept with consistent financial planning ls Professional and commercial qualifications (vocational training and practical professional experience) ls Equity capital used as an appropriate proportion of the total funding (generally 15 to 20 per cent) ls Secured overall project funding ls Aspirations to become a viable venture in the long term Guarantees As a general rule, public loans are to be secured in line with standard banking practice just like bank loans. If the required level of collateral cannot be achieved through personal col- lateral, a guarantee of up to 80 per cent of the loan volume can be requested from the Bürgschaftsbank zu Berlin-Bran- denburg GmbH (BBB) when setting up a company in Berlin. tions with regard to ordering goods and signing contracts or similar are covered and the business activities are registered. Please be aware that there are no legal claims to be made with regard to granting public funding. Promotional loans Promotional loans are the most common form of public funding for start-ups. For companies based in Berlin, both the Investitionsbank Berlin (IBB) and the KfW Bankengruppe offer various different types of credit. The advantage of these generally centres on their favourable interest rates, lower capital requirements, long maturities, and a repayment-free start-up period for the first few months. Promotional loans are typically requested via regular banks and savings banks (commercial banks), with whom you can also set up your business account – also known as the local bank (or ‘house bank’ principle). It is only when the commercial bank is satisfied with the details of your venture but does not want to make you an offer without funding that it forwards the funding application to the promotional bank. This instituti- on also checks the application and offers up the money if a positive decision is made. An exception to this can be found in the IBB’s micro-credit, which is offered for minor capital requirements of no more than 25,000 EUR (50,000 EUR for innovative companies), and can be requested directly from the IBB for a more direct route rather than having to go via a commercial bank. The funding is issued based on its inten- ded purpose, which means the relevant proof (in the form of receipts, etc.) of the investment provided must be submitted to the bank retrospectively. Financial Assistance  ihk-berlin.de/ financial-assistance CHAPTER 6 Bürgschaftsbank Berlin-Brandenburg (BBB)  bbb-berlin.com