Financing a New Business or Startup
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Are you planning to start a business and wondering how to finance it? The right financing will determine your ability to operate in the first few months. Here you’ll learn about the available financing options and how to proceed step by step.
Table of contents
Overview of financing sources
Depending on your legal structure, business model, and goals, different financing sources may be suitable. Common sources include the following:
Own Funds
Equity refers to the money you, as the founder, contribute to the company yourself. It is the most common and simplest source of financing and strengthens the confidence of banks and investors. Depending on the legal form, a minimum capital requirement is mandated by law: for a stock corporation (AG), it is at least 100,000 Swiss francs; for a limited liability company (GmbH), at least 20,000 Swiss francs.
Bank Loans and Guarantees
Banks grant loans for investments and working capital. A convincing business plan with realistic financial projections is usually a prerequisite. Check with your bank to find out the specific requirements and terms. If you cannot provide sufficient collateral, a guarantee may help: A guarantee cooperative guarantees repayment to the bank if you, as the borrower, are unable to do so. There are four guarantee cooperatives recognized by the federal government in Switzerland.
Business Angels and Investors
Business angels are private individuals who invest capital and often also bring experience to young companies. There are several hundred active business angels in Switzerland—many of them are organized into clubs through which you can make initial contact. Venture capitalists invest in high-growth startups. In return, they typically receive equity in the company.
Support Programs and Innovation Funding
The federal government or various partner organizations offer financial support for new startups. Funding programs are often earmarked for specific purposes and subject to certain requirements. For companies with research and development projects, there are also specific innovation funding programs.
How to finance your startup
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Create a business plan that describes your business idea, your market, and your strategy. The financial plan shows how expenses, revenue, liquidity, and earnings might develop over the next few years. It forms the basis for discussions with banks, grant applications, and investor meetings.
Determine how much equity you can contribute and how much debt financing you need. Note the legal requirements regarding minimum capital for your chosen legal form. Keep initial costs as low as possible: The larger your reserves, the longer you can remain operational even with below-average revenue. A strong equity ratio also improves your chances of securing bank financing.
Research early on which funding programs are available for your project. Many programs are tied to specific industries, technologies, or stages of business development. Submit funding applications in a timely manner, as approval processes take time.
For corporations such as AGs and GmbHs, you must deposit the initial capital into a bank account. The bank will then issue you a confirmation. You will need this for the notarization and the entry in the commercial register. Expect total costs of at least 1,000 Swiss francs: Opening the account costs around 150 to 300 Swiss francs, and the commercial register entry costs 500 to 700 Swiss francs.
Note:
The information on this page is for guidance only and is not exhaustive. Details should be clarified with experts or the relevant authorities as early as possible.
Contact
Further information
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Contact
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