How to finance your business project ?

Do you have a burning desire to build your business? Do you plan to strike out on a new professional experience? Do you want to give a new impulse to your business activity with a new project? Congratulations, but how will you finance your project if your funds are not enough to carry it out? Fortunately, Luxembourg is the perfect place to start and develop your entrepreneurial ventures. There are many ways to find potential financing solutions for your business. Here are the main ones.

Take out a loan from a bank

The bank remains the privileged interlocutor when you need funds to start your business, but it is obliged to ask for guarantees such as surety or mortgage. By providing sufficient guarantees, you should be able to access several types of financing suited to your business needs. If you do not have enough collateral to satisfy your bank, you can apply for assistance from the guarantee institutions of the two professional chambers. The from the Chamber of Commerce facilitates access to your bank financing by acting as a guarantor for up to 50% of any approved credit institution loan of up to 250,000 EUR. The , created in 1949 on the joint initiative of the Chamber of Skilled Trades and Crafts and the Federation of Craftsmen, acts as a financial partner in the provision of sureties of all or part of your project financing.

Reach out to the SNCI

Another option is the Société Nationale de Crédit et d’Investissement (National Credit and Investment Society). This public-law banking institution is specialized in medium- and long-term financing of Luxembourg-based companies. Under certain conditions, it grants loans at beneficial fixed interest rates for newly or inherited SMEs, investment, innovation and exports. On average, SNCI loans cover 25% of the investment in fixed assets or industrial projects and up to 75% of eligible investments incurred by craftsmen, traders, hotel or restaurant owners starting in business for the first time. You can find more information on or on the ING web page dedicated to .

Apply for public financial aids

Provided that you observe and fulfil the general terms and conditions applying to aid for SMEs (more information on ), you can benefit from the state support regime. The main measures are:

- Aid for investments in tangible assets (property, machinery, equipment, etc.) and intangible assets (patents, licences, etc.) up to a maximum of 20% for small enterprises and 10% for medium-sized enterprises.

- Aid for consulting services up to 50% of fees for services provided by external consultants (excluding tax or legal advisory services and advertising).

- Aid for a first-time participation in a trade fair, allowing you to cover the additional costs of renting, setting up and managing your stand.

- Aid to support young businesses in their growth phase: this aid applies to privately owned companies that are less than five years old, have not taken over pre-existing business activity, have not yet distributed profits and are not the result of a merger. If you belong to this category, you can receive subsidies and loans with advantageous rates, guarantees, recoverable advance or interest relief.

Use alternatives to bank loans

If you create a new innovative business, you can get help from a business angel. Also known as angel investors, they are often former CEOs or senior executives who have solid experience in business and invest their money into innovative start-ups to support them in the launch phase. They may invest between 10 and 30% of your capital and give you the benefit of their knowledge and network of contacts. You can find business angels in places such as the (LBAN), a networking platform for private investors and entrepreneurs and part of the European Business Angel Network (EBAN).

Venture capital companies are specialized in high-risk/high-return investments. Unlike business angels, who get involved in the early stages of your business, venture capitalists come in later when your company is showing high growth potential. They can offer substantial financial possibilities to help your company expand quickly. In exchange, they generally request to hold 10% to 20% of the company’s shares and be involved in the day-to-day management.

Where can you find help?

Many institutions can guide you as a new business creator and help you access financing: , the National Agency for Innovation and Research; the (Luxemburg House of Financial Technology), Luxembourg’s dedicated FinTech platform; devoted to empowering innovators in the industrial technologies; Technoport, the technology business incubator; Nyuko, guiding all types of local entrepreneurs in the pre-creational phase of their project,...

For more information, contact .

Are you an expatriate or a newcomer in the Grand Duchy? Visit our .