As a founder, sooner or later you will have to deal with the financing of your startup. Two terms that come up again and again are grant and loan. But what is the difference? And which form of financing is right for your company? Let's take a closer look.
1. the grant - money as a gift, but not without conditions
A grant is financial support that you don't have to pay back. Sounds good, doesn't it?
It is - with a few catches:
✅ No repayment: the money is yours as long as you comply with the funding conditions.
Often for innovative ideas: Grants are often available for research and development, sustainable technologies or start-ups with high innovation potential.
✅ Application & bureaucracy: The path to funding can be time-consuming - detailed applications, evidence and reports are almost always part of the process.
Examples of funding
ZAT (Green) Preseed: Funding for innovative high-tech start-ups in the pre-seed phase.
aws PreSeed & Seedfinancing: Funding for high-tech start-ups in the early phase.
FFG funding: Funding for research & development.
State subsidies: Depending on the federal state, there are subsidies for start-ups and SMEs.
2. the loan - money against repayment
A loan is basically a credit that you have to pay back with interest. This doesn't sound as sexy as a grant at first, but it also has its advantages:
✅ Higher sums possible: you can often get more money than with a grant.
✅ Flexible use: You decide what you use the money for.
✅ Independence: You don't have to bring in an investor, but remain the master of your startup.
Types of loans
ZAT Seed: Interest-free loan for innovative high-tech start-ups from foundation to growth.
Bank loan: Classic loans with a fixed term and fixed interest rates.
Microloan: For smaller sums, often from development banks.
ERP start-up loan: Low-interest loans especially for start-ups.
Promotional loans: State-subsidised loans with better conditions.
Tip:
Pay attention to the repayment terms - especially in the initial phase, a repayment-free period can help until the business is up and running.
3. grant or loan - which is better?
It depends on your situation:
Question | Grant | Loan |
Do I have to pay the money back? | No | Yes |
Is it hard to get? | Yes, because limited resources and strict criteria | Depends on the credit rating |
Can I use it freely? | Mostly not, earmarking | Yes |
How quickly can I get it? | Often takes months | Can go faster |
Do I need collateral? | No | Often yes. (e.g. businessplan, equity) |
Conclusion: The perfect mix of both is often ideal. Use grants wherever possible and supplement them with loans to finance growth.
Financing is a hot topic for founders - what are your experiences or questions?
Let us know in the comments!🚀💬
Comments