General Information - Favorable Loans & Grants
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General Information - Favorable Loans & Grants

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Every early-stage team should be aware of funding options that allow you to scale without giving up equity. Navigating the landscape of favorable loans and grants can be complex. On this page, you’ll find (1) an overview of the different types of support programs available, and (2) practical steps to help you secure the funding.

🔖 Contents on this page:

  • Grants vs. Favorable Loans
  • 1. Identifying Relevant Programs
  • 2. Checking Eligibility
  • 3. Assessing Cost-Benefit Ratio
  • 4. Preparing Documentation

Grants vs. Favorable Loans

Grants

Non-repayable funds are often aimed at specific innovation or research projects.

  • No ownership stake is given in exchange
  • Often focused on innovation, sustainability, or social impact
  • Detailed application process with specific criteria

Favorable Loans

Loans with more favorable conditions than the market, such as lower interest rates or longer repayment periods.

  • Unlike grants, these monies need to be repaid but often with generous terms
  • Can be used for a wider range of business activities

1. Identifying Relevant Programs

Look for programs specific to your location, industry, or business stage.

  🌱 Identify relevance by stage:

Incorporation
Business Plan Competitions, EXIST, Gründungszuschuss, Local Founder Support
(Pre-)Seed
Regional Funding Schemes, EIT, EIC, R&D Tax Allowance (BSFZ), National Grants
Series A
EIC, R&D Tax Allowance (BSFZ), National Grants

  🌐 Identify relevance by type of institution:

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2. Checking Eligibility

Eligibility varies depending on the specific program. Ensure your startup meets the necessary criteria for the desired program. Ask yourself the following question beforehand:

  • In what country is your company incorporated? In what region specifically?
  • How old is your business and what stage are you in?
  • Is your company financially stable?
  • Have you already received any grants (e.g. de-minimis limit for state aid)?
  • Does your start-up align with certain goals (e.g. environmental impact)?

3. Assessing Cost-Benefit Ratio

Look at the trade-off between the effort required to apply, the effort required to report, the maximum payout, and the likelihood of success.

Generally, the higher a program's potential payout, the greater the effort required for application and ongoing compliance. However, some programs, such as the R&D Tax Allowance, offer high payouts with relatively lower administrative burdens.

4. Preparing Documentation

Prepare a master file with updated versions of all required documents for quick access like business plans, financial history & forecasts, a project plan with detailed explanation of how the funds will be used and previous funding history.

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Tips
  • Keep detailed records of all costs.
  • Break down your product development into clear, fundable projects.
  • Avoid double funding. The same costs often cannot be claimed under multiple programs.

Thoughts? Feedback? Something missing? Please let us know: anna.roesler@b2venture.vc