Congratulations on your decision to become self-employed!

Did you know that as a former employee entitled to unemployment benefit I (ALG I), you can receive up to €9,300 tax-free from the employment agency? In this blog article, you will find all the important information about the start-up grant (Gründungszuschuss) and how to avoid having your application rejected.

What is the start-up grant (Gründungszuschuss)?

The start-up grant (Gründungszuschuss) is a form of support for founders who move from unemployment into self-employment. It enables you to secure your business financially during the first months after starting up.

How much is the start-up grant (Gründungszuschuss)?

The start-up grant (Gründungszuschuss) provides you with your full ALG I for six months, plus €300 per month for your social security contributions. This means that in the first half-year of your self-employment, you can receive up to €2,500 per month.

Requirements for the start-up grant (Gründungszuschuss)

To receive the start-up grant (Gründungszuschuss), you must meet the following requirements:

• You are entitled to ALG I.
• You have at least 150 days of remaining entitlement to ALG I.
• You have a viable business concept.
• You are working full-time in your business.
• You have no other income that exceeds the permitted additional earnings threshold.

How to apply for the start-up grant (Gründungszuschuss)

You apply for the start-up grant (Gründungszuschuss) at the employment agency responsible for your place of residence. You will need the following documents:

• The completed application form
• Your ALG I notification
• Your business plan
• An expert opinion on your business plan
• Proof of your qualifications and professional experience

Typical mistakes when applying for the start-up grant (Gründungszuschuss)

• The most common mistakes when applying for the start-up grant (Gründungszuschuss) are:

  • Incomplete documents: Make sure you submit all required documents in full and on time.
  • Implausible business plan: Your business plan must be detailed and coherent. It must set out your business idea, your target group, your marketing strategy, and your financial planning.
  • Missing expert opinion: The expert opinion must be prepared by a third party who has the necessary expertise.
  • Exceeding the additional earnings threshold: Observe the applicable additional earnings threshold. If your income from self-employment exceeds this threshold, your start-up grant (Gründungszuschuss) will be reduced or even withdrawn entirely.

Tips for successfully applying for the start-up grant (Gründungszuschuss)

• Inform yourself early: Read up on the start-up grant (Gründungszuschuss) on the employment agency’s website and contact an advisor if you have questions.
• Prepare a professional business plan: Take sufficient time to prepare your business plan and, if necessary, seek support from an expert (for example, from the advisors at XGroup).
• Obtain an expert opinion: Choose a reputable third party to prepare the expert opinion (for example, through the advisors at XGroup).
• Observe the deadlines: Submit your application to the employment agency on time.

Conclusion

The start-up grant (Gründungszuschuss) is an attractive form of support for founders moving from unemployment into self-employment. With good preparation and by avoiding common mistakes, you can increase your chances of approval.