The top 5 reasons for the start-up grant rejection

The start-up subsidy reform in 2011 has made it more difficult to receive funding because the hurdles have been significantly higher since then. For example, the start-up subsidy is only awarded on the so-called assessment basis. This means that there is no longer a legal entitlement to this subsidy and the clerk follows at his discretion can decide whether the start-up grant is granted. As a result, rejections are inevitable.

For founders, this means: Be well prepared for the interview with the clerk in order to convince them of the business idea. But don’t be shy, because the effort is worth it! After all, founders can be supported with the start-up grant for up to 15 months. This is tax-free and does not have to be paid back.

In order to have good chances here and to prevent rejection, it is important to know the reasons for the latter so that action can be taken at an early stage. We have the most important reasons for rejection researched and summarized for you.

1. Founders are uncooperative

It is often due to the founders themselves or their attitude that the start-up grant is rejected. If you want to apply for this, you should continue to write applications for vacancies. Before granting the subsidy, the employment office asks itself whether the desired business start-up is sustainable and whether there are no other options, such as a permanent position, for the applicant. Due to the so-called placement priority, the clerk first checks whether the applicant can be placed in an employment relationship. Anyone who explores the job market here and can prove several unsuccessful applications increases their chances of receiving the start-up grant.

2. Business registration was brought forward

Another reason why the application for a start-up subsidy can be rejected is that it is submitted too late. Because was initially z. For example, the business start-up is registered with the trade office through the business registration, the entitlement to ALG 1 and thus also to the start-up subsidy expires. It is therefore advisable to first submit the application for this and then to register the trade. However, anyone who is a recipient of ALG 1, runs a side business (sideline) and wants to expand it can still submit an application.

3. Missing remaining entitlement to ALG 1

Founders should pay particular attention to deadlines when applying for start-up grants. Because even if the application is submitted too late, this means a rejection. Anyone who wants to become self-employed should therefore start applying early and check whether there are still at least 150 days remaining entitlement to ALG 1. Only when this is the case can the application for funding be made.

4. Poorly researched business idea

Another point concerns the business idea. If founders have done too little research into their business model, this is also noticeable when applying for start-up grants. For example, if you state that you are the only founder of a nail salon in the vicinity, the clerk will check this and possibly then determine that there are already twenty others with the same range of services. The probable consequence: the start-up subsidy will not be granted. In order to be well prepared here, location, competition and price analyzes are mandatory.

5. Submit incomplete documents

Germany is often described as a land of bureaucracy. This also plays a major role when applying for start-up grants. If you want to avoid being denied funding, you should ensure that your documents are complete. A lot of “paperwork” is required of founders here. In addition to the application itself and the professional business plan including financial plan, the necessary certificates and references as well as the important expert opinion (certificate of viability) should also be attached. If these are incomplete or incorrect, delays or, in the worst case, rejection must be expected.

Tip: Business start-up advice can help when applying for a start-up subsidy, with a certified consultant helping the founders with the application and beyond the process of setting up a business. The consultant knows which documents are required and helps to compile and prepare them.

service tip: Workshop “My business idea”