If you make a survey among people who have fulfilled their dream and finally dared to take the step into self-employment, whether everything went as they had imagined, then you will often reap a shake of the head. Most young entrepreneurs underestimate the administrative burden and the costs that come their way in the first two years. Many turn to a bank asking for a loan for young entrepreneurs, but they also shake their heads.
The Credit for Young Entrepreneurs: A Question of Creditworthiness
The problem with a loan for young entrepreneurs is the fact that the credit rating is not secured. Normally, people prove their ability to pay back their income, the amount of which can be proven by the employment contract. Young entrepreneurs do not have this. Later, the business analysis and the BWA give an idea of how well or bad a company is, but for now, this is not true, as the company is too fresh in the market.
The Credit for Young Entrepreneurs: Collateral eliminates obstacles
What the bank needs is a guarantee that it will still get back its money. The easiest way to prove that is the guarantor. This is a person who has a regulated credit standing and signs a statement in which it states its willingness to stand up for the loan and repay it in an emergency. Alternatively, valuable assets such as land, buildings or vehicles can be used. Many people also opt for part-time employment. This means they work half-days and can assure that at least a small income persists.
The Credit for Young Entrepreneurs: The Special Case Unemployed
These problems and possible solutions do not necessarily apply to people who venture out of unemployment into self-employment and become young entrepreneurs. The state supports such decisions through special support programs to reduce unemployment and therefore grants loans to a certain extent. These usually only have to be repaid if the business idea has been successful for a certain period of time. Otherwise, the loan for young entrepreneurs immediately turns into a subsidy that does not have to be repaid.