Founder: Combine microloans with crowdfunding

In Saxony, start-ups can now combine funds from successful crowdfunding with the microloan funding program.

This article is part of the special feature GründerNavi – for founders and young companies

Saxony is launching the pilot project " Saxony-MicroCrowd ." This allows entrepreneurs in Saxony to combine funds from a successful crowdfunding campaign with the "microloan " funding program . The crowdfunding funds are recognized as the entrepreneur's equity contribution when applying for the microloan . This combined financing has the advantage that even entrepreneurs with limited equity can start and invest on a solid financial foundation . Furthermore, the feedback from interested parties during the crowdfunding campaign serves as valuable market testing.

Saxony relies on modern forms of financing

"I am confident: Saxony MicroCrowd is the right approach for the future of our Saxon economy," says Saxony's Minister of Economic Affairs, Martin Dulig . "Crowdfunding is already frequently used by creative professionals and entrepreneurs with innovative ideas." They could now receive even better support through microloans if the business is intended as their primary source of income. "With this, Saxony is breaking new ground and embracing modern forms of financing . We are unlocking additional potential in the field of innovative startups through a mix of private and public funding."

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Microloans without detours

The microloan provides up to €20.000 for business start-ups and the consolidation of young companies for up to five years after their founding. If the crowdfunding campaign successfully raises the required funds, the otherwise applicable condition for the microloan—that the project be evaluated by an expert body— is waived . Applications for a microloan can be submitted to the Saxon Development Bank (Sächsische Aufbaubank – Förderbank) .

Crowdfunding: In crowdfunding, many backers (the crowd) finance ideas, projects, and companies they want to support with small contributions. This is usually organized via a platform where projects present themselves, set their funding goals, and build relationships with supporters. For the two-year pilot project "Sachsen-MikroCrowd," the Saxon Development Bank (Sächsische Aufbaubank – Förderbank) is cooperating with the experienced platform provider startnext Crowdfunding GmbH in Dresden. Since its founding in 2010, Startnext has built one of the largest crowdfunding communities in the German-speaking world.

Source: sachsen.de