Starting a Business Without Equity: Is It Possible?

Equity: what KfW requires and what the house bank expects

For most programs (for example StartGeld 067 or the ERP development loan for SMEs), KfW requires no minimum equity; formally, up to 100% of the costs can be financed. However, because the loan runs through your house bank and the house bank shares the risk, the bank in practice usually expects 10–20% own funds before it commits. Equity improves creditworthiness, terms, and the likelihood of approval.

Exception for takeovers and succession: Here the equity ratio is often less decisive, because the running business with its cash flow and assets serves as collateral. We prepare your application in such a way that the house bank goes along with it.

Can I Start a Business Without Equity?

Yes, it is possible, especially for service and online start-ups with low capital requirements and through development loans such as KfW StartGeld, which does not necessarily require equity. Without any cushion at all, however, it is more demanding.

The lower the capital requirements, the easier it is to start without equity. For capital-intensive projects (production, hospitality), the hurdle rises.

How Much Equity Does the Bank Really Want?

There is no fixed ratio; funding programs allow up to 100% external financing. In practice, however, banks like to see 10–20% equity, because it signals ownership and reduces risk.

If equity is missing, this can often be offset by a guarantee, very robust planning, or collateral.

Which Funding Is Available Without Equity?

First and foremost KfW StartGeld (067): up to €200,000, no mandatory equity, with an 80% liability exemption (Haftungsfreistellung). If collateral is also missing, the guarantee bank (Bürgschaftsbank) steps in with a default guarantee (up to 80%).

What Role Does the Guarantee Bank Play?

The guarantee bank of your federal state takes on the collateral risk that you cannot cover yourself, up to 80% of the loan. This allows the house bank to finance even though you lack collateral.

Without a house bank, a guarantee is also possible directly through “Bürgschaft ohne Bank” (BoB); the maximum amount is set by the guarantee bank of the respective federal state.

Does KfW StartGeld Really Work Without Equity?

Yes. StartGeld requires no minimum equity. What matters are a viable concept, a clean credit standing, and a house bank that supports the project; the KfW liability exemption helps with this.

What Risks Does Starting Without Equity Involve?

An honest assessment: without equity, the entire financing is debt. That means interest and repayment burdens from the start, less of a buffer for setbacks, and a higher risk of liquidity shortfalls.

Therefore plan especially conservatively, keep a liquidity reserve, and check whether a grant such as the start-up grant (Gründungszuschuss, § 93 SGB III) can secure your living costs in the start-up phase.

How Do I Convince the Bank Without Equity?

With a bankable business plan, realistic numbers, proven professional qualification, and, where necessary, a guarantee. The more convincing the concept and financial plan, the more willing the bank is to go along without the equity.

This is exactly where we come in: we prepare your documents so that your project appears financeable even without equity.

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