Subsidies and business support: where to look for funding

Your own resources and loans are not the only way to finance growth. Subsidies and business support can help with investments, innovation or training, but finding your way around them is rarely easy. It pays to know where to look and how to prepare an application so that you do not miss an opportunity. Support is neither automatic nor an entitlement, but with good preparation and a timely overview of the calls for proposals, it can significantly ease the financing of your plans.

What forms of support exist

Support does not take just one form. Besides non-repayable subsidies, it includes preferential loans, guarantees, tax relief, and advisory and training programmes. Each form has different conditions and a different administrative burden, so it pays to compare which one suits your plans best.

Where to look for funding

Support is provided at several levels at once: European and national programmes, regional schemes, and specialised agencies and institutions focused on business development. You can keep track by following official sources and calls on an ongoing basis, not only when you urgently need the money.

• National and European business support programmes.
• Regional and sector-specific schemes for particular projects.
• Agencies and institutions focused on small and medium-sized businesses.

What the conditions usually are

Each call has its own rules. Typically, the size of the company, its field of business, the purpose of the project and its alignment with the objectives of the programme are assessed. Co-financing is also common, meaning that you have to cover part of the costs from your own resources. That is why you should read the conditions before you start preparing the application.

How to prepare for the application

A successful application rests on a well-prepared project and clean administration. Prepare a clear description of your plan, a budget and the expected benefits. Orderly accounting is also important, as is the ability to demonstrate that the company is eligible to draw the support and subsequently account for it correctly.

Watch out for the obligations after you receive support

Receiving support is not the end of it. A subsidy comes with obligations, such as complying with its purpose, keeping records and maintaining the sustainability of the project for a certain period. Failing to meet them may mean having to return the funds. That is why you need to plan from the outset for the administration that accompanies drawing the funds.

Timeline and patience

Obtaining support is usually a long-distance run. From the announcement of the call, through the preparation of the application and its assessment, to the actual payout of the funds, a considerable amount of time can pass, and you need to factor this into your financing plan. So do not rely on a subsidy to cover an urgent need for cash; see it rather as support for a longer-term plan. It pays to follow upcoming calls well in advance and to have your project thought through even before the call opens. If your application is well prepared in advance, you gain a head start over those who put theirs together in a hurry. At the same time, bear in mind that you will often have to finance part of the costs yourself and that the subsidy money only comes retrospectively, once the conditions have been met.

Who to work with on drawing the funds

Both preparing and accounting for subsidies demand precision. An accountant will help you assess whether you meet the conditions for support, account for the funds correctly and fulfil your obligations so that you do not run into problems during an inspection. Good preparation increases your chances of success and protects you from having to return money later.

Related articles: Capital funds and paying them out to shareholders, Company valuation: methods and what affects value, Break-even point: when your business starts to pay off.

Frequently asked questions

Do I have to co-finance a subsidy from my own resources?

For many programmes, yes. It is common for support to cover only part of the project costs, with the rest financed by you. The exact co-financing rate varies from call to call, so you need to check it in the conditions of the specific call.

What happens if I do not comply with the conditions of the subsidy?

Failing to comply with the purpose, the record-keeping or the sustainability requirements of the project may lead to an obligation to return the funds provided, sometimes with a penalty as well. That is why it is important to keep track of all the obligations associated with drawing the funds from the outset and to keep your documentation in order.