Do you have a plan, an idea, a burning desire to strike out on a new professional adventure or build your business? You may have the drive, but getting your hands on the cash is often a gruelling process. Fortunately, Luxembourg is a favourable environment for start-ups, and there are many ways to secure funding for them. myLIFE has whipped up a shortlist of potential financing solutions for your business.
After making your way through your company’s internal resources (your equity capital, that is), your list of potential partners and patrons, and even your friends and relatives, you still have many resources at your disposal. Besides business angels and other venture capitalists, the obvious answer to funding your start-up is to turn to a lending institution. If your plan holds water, your pitch is convincing and you can offer the bank appropriate collateral, you should be able to access several types of financing (investment loans, leasing arrangements, overdraft facilities, etc.) suited to the needs of businesses.
Another option is to reach out to the SNCI, the Société Nationale de Crédit et d’Investissement (National Credit and Investment Society). This “public-law banking institution specialised in medium and long-term financing of Luxembourg based companies” grants loans for start-ups and business transfers, investment, innovation and exports. On average, this financing covers 25% of industrial project costs, but may cover up to 75% of eligible investments in the case of an equipment loan for craftsmen, tradesmen, and hotel and restaurant owners setting up their first business. Take time to read through the many financing options they have to offer.
Declined for a loan? Don’t despair; there are alternatives. If you have little or no capital yourself, you can turn to microfinance institutions.
Reaching out to an investment fund is another way to grow your company. The SNCI (Société Nationale de Crédit et d’Investissement) and the EIF (European Investment Fund) have jointly established the Luxembourg Future Fund. With a volume of €150 million, this fund invests directly and indirectly in innovative SMEs in the start-up, development and growth phases.
The Digital Tech Fund is a seed fund for start-ups in the field of ICT. Created by the Luxembourg government and seven private investors (including BIL), it provides financial support for budding firms in the launch phase.
The Ministry of the Economy in Luxembourg offers a range of grants for start-ups and established SMEs, which are provided for by law (aides de la loi-cadre classes moyennes). These grants can be a great help to entrepreneurs, whether they’re in industry, commerce, construction or services. The state aid scheme was reformed in Luxembourg in 2018. Changes were made and new forms of aid were introduced.
As a final tip on our tour of the financing landscape, don’t forget Luxembourg’s efforts to create a welcoming community for start-ups. Many institutions have been established to guide new business creators and help them access financing ((House of entrepreneurship, House of Startups, LHoFT, Luxinnovation, Nyuko, Technoport, Paul Wurth InCub, Luxembourg-City Incubator,). Events are organised for promising new companies, especially in the field of new technologies. These include Fit4Start, Pitch your Startup and Startup World Cup Luxembourg to name a few. Most of these events are really competitions allowing participants to secure subsidies and meet potential investors. They are yet another way to find funding for your company and bring your plans to fruition. Don’t miss out!
Sustainable development issues have been a key concern in recent years, and businesses have a…
When it comes to investing, it’s advisable to take the long view and to follow…
Have you ever been to a meeting that seems to drag on with no meaningful…
In a hyperconnected world that constantly demands our attention through messages, notifications and alerts, it’s…
What distinguishes a manager from a leader? What are the rules of leadership, what mistakes…
Just launched a new product or service, or created an online store? Want to stand…