Principle of the funding programs

Funding programs are the means for the federal, state and EU governments to remove obstacles for companies and thus become entrepreneurially active. The problem that has always existed is that beneficiaries and founders "can't see the wood for the trees".

It is good to know that there are a large number of different funding programs and each program follows almost identical principles. Which are: House bank principle (for financial assistance), pre-start clause, legal entitlement, partial financing by the applicant, customary bank security, earmarked use of funds, misuse is punishable. Now, however, many who have already started their project are beginning to doubt whether they still have the opportunity to receive funding. Experience has shown that projects are planned more globally from an entrepreneurial point of view. Therefore, there is always the possibility of considering individual aspects separately and thus not violating any of the principles.

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In order to get an overview, I have listed the individual conditions again!

  1. house bank principle

Applications for public funding must be made through your own bank. Waiting times for approved funding can last up to six months. As soon as the approval notice is there, the house bank can call up the funding.

  1. pre-commencement clause

The project may only start once the funding has been applied for! So first funding, then contracts!

  1. legal claim

There is no legal entitlement to funding.

  1. Equity financing by the applicant

Almost all institutions like it, even if the amount is not specified, that a self-financing of at least 15 % be planned for a new company. This only applies to raising outside capital. This does not apply when it comes to obtaining non-repayable funding. The degree of maturity of the project or product to be funded is decisive here. In general, the closer you are to basic research, the higher the funding rate.

  1. Customary bank security

The banks also expect security when it comes to subsidies, especially when starting a new business. It is therefore another good reason to prepare a business plan. This helps to maintain an overview and also helps the banks to get an impression of you and the project.

  1. earmarked use of funds

Funding is for a specific purpose and may only be used for that purpose. This use must be proven. The form of proof varies greatly and is clearly formulated by the respective funding agency.

  1. Abuse is punishable

Funding must be used for the stated purpose. Using it for other purposes is a case of subsidy fraud. The Criminal Code provides for a five-year prison sentence. Apart from this penalty, I always have to recognize in my consulting that the funding serves to generate sales with the results after the project has been completed. If this is not the case, a project success is hardly visible to me!

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In addition to the basic provisions, the support measures can be divided into areas. This division usually helps to sort the apparent chaos in the funding landscape:

  • general financial assistance
  • need-based start-up financing
  • Promotion of education and training
  • Promotion of research and development
  • Programs to improve the environment
  • Advisory Funding