Credit for Starting a Side Business: Your Path to Financing
17 Jun 2025
9
Minutes
Katrin Straub
CEO at nextsure
Do you dream of turning your passion into a profession, but find financial constraints holding you back? A loan for starting a part-time self-employment could be the solution. Discover how to convince banks and learn about the funding opportunities that can make your start easier.
The topic in brief and concise terms
A detailed business plan is the most important prerequisite for successfully applying for a loan.
The ERP founder's loan – StartGeld from KfW is an excellent funding option for part-time entrepreneurs and does not require any equity.
Guarantee banks can compensate for missing securities and significantly increase the chances of obtaining a bank loan.
Realistically calculate the funding needs for the start
Every business startup begins with a detailed cost estimate. List all one-time startup costs like licenses or the purchase of equipment. Also, consider the ongoing expenses for the first six months. For example, an online shop might have initial costs of 2,000 euros for creation and 300 euros monthly for marketing. A precise calculation prevents the need for additional financing and demonstrates your professionalism to the bank. This meticulous planning is the first step towards a compelling funding application. It lays the foundation for further discussions with potential investors.
The business plan: Your central argument for lending
A compelling business plan is essential for obtaining credit. It not only documents your business idea but also demonstrates its economic viability. Even if you only need 10,000 euros, a solid plan is crucial. Banks scrutinize your proposal carefully before granting a start-up loan. The following points must not be missing:
Business idea and founder profile
Market and competition analysis
Marketing and sales strategy
Legal form and organization
Financial plan with revenue and profitability forecast for three years
Liquidity planning and capital requirements analysis
A well-structured financial section shows that you have a good grasp of your numbers. A detailed plan is therefore the most important prerequisite for successfully seeking financing.
Using Funding: The KfW Founder Credit as a Top Option
State funding programmes are an excellent way to secure financing. The ERP Start-Up Loan – StartGeld from KfW is specifically designed for part-time entrepreneurs. You can apply for up to €125,000 for investments and ongoing costs. A major advantage is that KfW covers eighty per cent of the default risk for the home bank, which significantly facilitates lending. Since the beginning of 2025, transitioning to full-time self-employment is no longer mandatory. This loan requires no equity, making it particularly attractive for founders. With these funds, you can often start more easily than with a loan without equity from a regular bank. The application is always made through your home bank, which forwards the application to KfW.
Classic bank loans and the role of collateral
Even a classic installment loan from your own bank can be an option. However, banks require collateral and a positive credit report for a business loan. Collateral can include, for example, life insurance policies or real estate. If these are lacking, obtaining a loan becomes difficult. This is where guarantee banks come into play. They can guarantee up to eighty percent of the loan amount, thereby minimizing the risk for the bank. A guarantee can open the crucial door to the capital you need. Remember, even with negative credit entries, there are specialized routes such as a loan for the self-employed despite negative credit. Open communication about your financial situation is always the best approach.
Do not neglect legal frameworks and insurances
Before starting, some formal hurdles need to be overcome. Inform your employer about your plans to avoid contractual conflicts. Register your business with the relevant trade office; freelancers apply for a tax number directly with the tax office. Check the small business regulation, which exempts you from VAT up to an annual turnover of 22,000 Euros. Also, inform your health insurance provider, as your contribution may change. Correct registration from the start protects against later problems. A frequently overlooked aspect is personal protection, such as occupational disability insurance for the self-employed. This protects your income if you are unable to work for health reasons.
Actively manage the risks of self-employment
Starting a business always involves risks, but these can be strategically minimized. Liability insurance is essential for many activities. It protects you from the financial consequences of damages you cause to third parties, often with coverage exceeding three million euros. For creative professionals, financial loss liability insurance may also be worthwhile. Think about your own health as well. An appropriate affordable health insurance for the self-employed ensures your medical care. A well-thought-out insurance plan is not a cost factor, but an investment in the stability of your business. This way, you secure not only your business but also your private existence.
Request an individual risk analysis now: Have your insurance situation checked free of charge and receive specific suggestions for optimisation.
More useful links
Existenzgründungsportal des BMWK provides information on funding for part-time entrepreneurship.
IHK München offers a guide to part-time self-employment.
Gründerplattform provides information and business ideas for part-time self-employment.
Existenzgründungsportal des BMWK informs about applying for the start-up grant in part-time self-employment.
Wikipedia features an article on the topic of secondary trade.
FAQ
What are the first steps to apply for a loan for part-time self-employment?
First, create a detailed business plan, including a financial plan. Realistically calculate your capital requirements. Next, arrange a meeting with your bank and inquire about development loans such as the KfW StartGeld.
How important is equity for the start-up loan?
Equity increases your chances and improves conditions, but it is not always mandatory. The ERP Start-Up Loan – StartGeld from KfW can be applied for without equity, which represents a great relief for many entrepreneurs.
What happens if I don't have collateral for the loan?
If you have insufficient or no collateral, you can apply for a deficiency guarantee from the guarantee bank of your federal state. This assumes a large portion of the risk for the lending bank, thereby increasing your chances of obtaining financing.
Which insurances are important for a part-time self-employment?
A business liability insurance is essential to protect oneself against claims for damages from third parties. Depending on the activity, a financial loss liability insurance may also be necessary. Additionally, you should secure your own workforce with an occupational disability insurance.
Can I apply for the KfW loan directly with KfW?
No, applying for KfW promotional loans is not done directly with KfW. You always submit the application to a financing partner of your choice, usually your main bank. They review the application and forward it to KfW.
Does a part-time business need to become a main source of income?
Previously, this was a requirement for many funding programs. However, since an adjustment in early 2025, with the ERP Start-Up Loan – StartGeld, it is possible to permanently operate a business part-time without the intention of switching to full-time.
