Financing for the self-employed in the cultural and creative industries- a guide

cultural and creative industries is an extremely dynamic and growing industry, completely contrary to the popular opinion. With an impressive economic contribution of EUR 174 billion in 2019, she established herself directly behind the automotive industry as the second largest industry in the country. She recorded around 1.2 million regular employees in the creative sector. This included approximately 258,790 independent freelancers and entrepreneurs.

This diverse industry includes areas such as the music industry, the book and art market, the film and broadcasting industry, representing arts, the design management, the architecture market, the press market, the advertising market as well as the software and games industry.

In order to sustainably promote the cultural and creative sector, the Federal Government launched initiative for cultural and creative industries Federal Competence Center for Cultural and Creative Industry in Berlin. These measures aim to significantly increase competitiveness in this area and to optimally use and further develop the potential for new jobs.

still faced with the challenge of receiving financial support for their projects when practicing their activities The necessary infrastructure such as technical equipment, software and materials must be financed. Office or shop areas also have to be rented and maintained. In some cases, construction financing necessary for the construction or renovation of suitable rooms.

Much of it requires pre -financing. It is not uncommon for creative people to shy away from visiting a bank, especially if there is no capital or collateral to get a conventional loan.

In particular, freelancers or creative people who strive for the next step in their career should seek contact with banks. The acceptance of a loan for financing your own company harbors certain risks, as in other economic sectors. It is therefore important to take some crucial aspects into account before daring to take this step.

Find the right lender, challenges and risks

Anyone looking for a loan is often faced with a large number of providers who supposedly promise every conditions for themselves. In many cases, however, it can happen that borrowers recognize interest traps too late or pass on their personal data to dubious sham lovers.

It is therefore crucial to carry out comprehensive research deciding on a loan Serious platforms, information portals for consumer protection and Stiftung Warentest offer you the opportunity to compare loans quickly and easily, so you will receive a clear overview of the various credit conditions.

It is also recommended to consider alternative financing options There are numerous credit institutions online that offer different types of loans, including instant loans, installment loans and many more. It is important to note that a loan represents far more than just a signature and a high amount of money. Experienced consumers know that loans are associated with risks, such as cost overestimates, over -indebtedness and uncontrolled expenses.

For this reason, borrowers are strongly recommended to first inform themselves, to obtain second opinions and to be particularly vigilant when searching for the loan. There are also loan -like financing options that friends, family members or other unknown donors can be provided.

If you choose a private loan , it is advisable to record all agreements in detail in a contract and to negotiate both possible risks and suitable solutions.

Credit programs for freelance artists, freelancers and start -ups in the creative industries

In addition to conventional borrowing from banks and credit institutions, the KfW (Kreditanstalt für Recovery) tailor -made loans and start -up loans, especially for independent artists, freelancers and company founders.

This institution is an indispensable partner for creative minds by providing a comprehensive range of support programs that aim to make it easier to get started with professional self -employment.

Klaus Müller from KfW Capital emphasizes:

Creatives have been growth drivers in Germany for years. That is why you also need money for your great ideas. We also want to encourage you with our funding loans. Ultimately, this is our legal mandate. "

Applications for these funding are easily submitted via your house bank. A special measure is the so -called liability exemptions, which reduce the risk of default for the house bank and thus make a significant contribution to the credit decision. The numerous advantages of these KfW funding include not only cheap interest and long terms, but also a repayment-free period in the first few years. This is particularly important because the financing needs of many creative founders are often only in the range of a few thousand euros and no formal minimum amounts are required.

For creative people, for example, the ERP start-up loan (No. 067) and the ERP promotional loan SME can be used with or without taking risks (No. 365, 366) .

An outstanding feature of these programs is the possibility of a second chance : Even if you have already experienced a failed foundation, you can access KfW funding products again on the condition that former KfW loans have been completely repaid. The KfW not only supports innovative ideas, but also the unshakable entrepreneurial spirit of artists and freelancers on its way to success.

Credit for artists: Application for German banks and credit institutions

Basic prerequisites

If you choose a loan from a bank or a credit institution, it is crucial to find out about the requirements and the offer.

The basic requirements for all German lenders are of the age of majority, full legal capacity, an official place of residence in Germany and a checking account at a Deutsche Bank. Evidence of the income situation, creditworthiness and creditworthiness are also required.

Income relationships

After checking the basic requirements, the applicant's income is analyzed. Freelanding artists in particular often have difficulty proving regular income, which makes the loan application difficult.

Nevertheless, it is not impossible for artists to receive a loan - if all requirements are met and there are no negative characteristics, there is the possibility of approval by the credit institutions.

Examination of the applicant's Schufa entries

A central criterion for lending is the credit check , in which the Schufa score is used. This score reflects the applicant's creditworthiness: a low value shows good credit rating, while a high value indicates negative aspects.

Artists should optimize their Schufa data in order to obtain better conditions for loans. Even with a negative or problematic score, there are credit options, for example through "Schufa-Free Loans" , which use the alternative evaluation methods.

Loan security

A central element of the credit assessment is the ability to provide both personal and factual loan reliability. In particular, the collateral gain crucial importance in the Schufa-free loan variant.

Banks accept different types of collateral:

Personal loan security

This form of loan security includes the name of a second borrower and the provision of a guarantee. The guarantee can be divided into two categories: own guarantee and partial guarantee . In the case of his own guarantee, the co -applicant is directly involved in the conclusion of the contract and undertakes to pay the monthly installments such as the main applicant. In contrast, the stored guarantee is committed to standing up for the loan in the event of a default of payment by the main applicant.

The guarantor thus acts as the third party who only has to take action if the borrower becomes insolvent. It is important to note that guarantees can often be received under certain reservations.

This means that the guarantor is only obliged to pay if all enforcement measures have actually been carried out and the borrower in question no longer has any usable assets.

Factual loan security

In contrast to personal loan security, this variant does not include a third person in the loan process. Objective credit reliability can include one or more mortgages that can be used in the event of a non -repayment of the loan. At a mortgage, the lending bank receives a lien on the house or property, which can be enforced in the event of a credit case.

In addition, valuable objects such as jewelry, watches, vehicles, stocks or securities can also serve as material collateral for the loan. Since such loan reliability can often tempt banks to approved an application more easily, it is advisable to consider this. However, make sure that you are ready to lose your property in an emergency. In addition, special guarantee insurance be an advantage in order to receive additional protection.

Building finance for the self -employed: a guide for creative

Financing a home or a commercial property is an important step in life for many people. However, this process can be a special challenge for self -employed and freelancers. Although they are capable entrepreneurs and creative minds, they often encounter obstacles when it comes to procurement of building finance .

In this section we shed light on the essential aspects of the construction finance for the self -employed, give practical tips and want to offer valuable insights that could help you successfully master this hurdle. Here we were largely supported on the technical side by the specialists for building finance at Baufi Germany .

Why is building finance more complicated for the self -employed?

The primary reason lies in the uncertainty of your income. In contrast to employees who receive fixed monthly salaries, the income of self -employed persons vary greatly. Banks and credit institutions see this as an increased risk and are therefore often more careful when lending.

What exactly makes the situation risky?

Self -employed people have no guaranteed long -term contracts or regular salary checks. Your sales can be subject to seasonal fluctuations or influenced by economic conditions. These imponderables make it more difficult for banks to assess the creditworthiness.

Optimal preparation for bank talks is therefore of even greater importance for this group.

Financial preparation: a must for self -employed

If you, as a self -employed person, strive for construction financing, the thorough preparation is essential. This includes:

1. Annual financial statements and tax notices : Banks usually call for the annual financial statements and tax assessments of the past two to three years to evaluate their financial stability and performance.

2. Business evaluations (BWA) : The BWA gives an overview of the current business figures and helps to document the economic situation of your company.

3. Business plan and forecasts : A detailed business plan and future sales forecasts can help to convince the bank of the long -term stability of your company.

4. High equity component : A higher share of equity reduces the risk of the bank and improves its chances of building finance.

Choosing the right credit institution

Not all banks have the same criteria or the same willingness to take risks. Therefore, it is essential to find a bank or a loan broker who has experience with the self -employed.

What should you pay attention to when choosing?

1. Experience in dealing with the self -employed : Some banks have developed special programs and criteria for the self -employed and are therefore more willing to grant them loans.

2. Personal advice : Use the possibility of individual advice. An experienced consultant can help you better understand the requirements and optimally prepare your documents.

3. Flexibility of the conditions : Check whether the bank offers flexible repayment conditions, such as special repayments or adjustments to the installments. This flexibility can be crucial if your company has fluctuating income.

Use funding opportunities

The self -employed can also benefit from various state support programs and grants. Programs such as KfW funding loans (see section above) offer interest-bearing loans and repayment grants. In addition, repayment -free years are often granted until repayment.

What funding is available?

1. KfW funding loans : The Kreditanstalt für Wiederaufbau (KfW) offers numerous funding programs especially for building construction and energy-efficient renovation.

2. Regional grants : Find out about regional funding programs that may be tailored to your specific situation and the location. considered for a subsidized micromzzanine fund at the state level

3. Wohn-Riester : Even self-employed can benefit from the residential promotion under certain conditions. This can offer additional financial support from government allowances and tax benefits.

Credit check: Preparation is the key

An essential step on the way to building finance is the credit check. Your previous financial behavior will be analyzed. Self-employed should ensure that your Schufa entries and other creditworthiness data are positive.

How can you improve your creditworthiness?

1. Told debts : If possible, you should reduce existing debts to increase your creditworthiness.

2. Regular payment method : Make sure that your bills and loans are always paid on time.

3. Schufa self-disclosure : Request a self-disclosure at Schufa regularly to ensure that all entries are correct and up-to-date.

Strategies for successful construction financing

Despite the challenges, the self -employed can successfully receive construction finance by following some key strategies:

3. Complete documentation : Make sure that your financial situation is clearly and comprehensibly documented. All relevant documents should be arranged and easily accessible.
4. Sustainable corporate management : If your company has stable and growing income, this has a positive effect on lending.
5. Professional advice : If necessary, consult a financial advisor or credit broker who specializes in building finance for the self -employed. numerous tips for building finance for the self -employed on the Consumer side of the construction work . There are also experts at you for free video or telephone advice.

Risks and protection

The topic of risk protection is also important, fundamentally for all types of financing. The self -employed should worry about possible loss of income and their protection.

Which hedges make sense?

1. Professional insurance : This insurance protects you from the financial consequences of disability.

2. Life insurance : The family can secure a risk life insurance financially in the event of death and also serve as a securing for the loan.

3. Daily daily insurance : This insurance ensures that you have regular income even in the event of long -term illnesses.

Avoid frequent error in building finance

Building finance for the self -employed is undoubtedly more complex than for permanent employees. Many make certain mistakes that can reduce their chances of successful financing or lead to financial problems.

Here are the most common mistakes in building finance for the self -employed:

1. Inadequate preparation of the documents

A widespread mistake is the insufficient preparation of the necessary documents. A lack of annual financial statements, tax notices or business evaluations (BWA) can delay the application or even destroy.

Solution: Collect all relevant financial documents and make sure that they are current and complete. Acribric documentation is the be -all and end of the end here.

2. Inadequate income documentation

The self -employed often have an irregular income, which makes it difficult to demonstrate a stable financial situation. Without a clear presentation of its income and expenses, the bank can reject its application.

Solution: Create detailed income forecasts and present a historically detectable income development. This can convince the bank that its income is stable enough despite fluctuations.

3. Incorrect assessment of financial resilience

Self -employed often underestimate the financial burden that building finance brings with it. Unforeseen costs or loss of income can quickly lead to financial bottlenecks.

Solution: Calculate your financial resilience realistically and also plan buffers for unforeseen expenses. Sustainable financial planning is crucial here.

4. Not sufficient equity

A common mistake is to go into construction finance with too little equity. Banks prefer borrowers who can contribute a higher share of equity as this reduces the risk of the bank.

Solution: Try to provide at least 20-30% equity. This increases your chances of a loan approval and can also lead to better conditions.

5. Non-consideration of funding programs

Many self -employed support programs overlooked that could help you with construction finance. This can be a missed opportunity for cheaper conditions or additional financial support.

Solution: Find out more about government funding programs such as KfW loans or regional grants. These can often be combined with your construction financing and lead to considerable cost savings.

6. Invaluation of loan offerings

Another frequent mistake is to rely on the first offer without making a comprehensive comparison of different loan offers. This can cause you to pay higher interest rates or receive less flexible conditions.

Solution: Compare various offers and use credit brokers who have experience with the self -employed. This helps you find better conditions and lower interest rates.

7. Neglection of insurance

Many self -employed do not take into account the necessary insurance companies, which in the event of illness or disability secure the repayment of the building finance. This is a great risk that in an emergency can lead to serious financial problems.

Solution: Complete occupational disability insurance, risk life insurance and possibly a daily sickness benefit insurance. These insurance companies can help secure your loan and to ensure financial stability.

8. Inadequate liquidity reserves

Self -employed often plan only briefly and have insufficient liquidity reserves for their ongoing business expenses and the repayment of the construction loan. This can be problematic in economically bad times.

Solution: Create sufficient liquidity reserves to bridge financial bottlenecks. A reserve of three to six months of running costs is recommended.

9. Neglection of the creditworthiness

A common mistake is to know your own creditworthiness inadequate. Negative entries in Schufa or other creditworthiness information can endanger your loan application.

Solution: Request Schufa self-disclosure and check your credit status. If necessary, correct incorrect entries and work to improve your creditworthiness.

10. Ignore market conditions

Self -employed people who do not take the current market conditions into account can easily get into a financial trap. Interest developments and real estate prices affect the total costs of their mortgage financing significantly.

Solution: Observe the real estate market and interest development. If necessary, wait for a cheaper time or adjust your financing strategy accordingly.

By avoiding these frequent mistakes, self -employed can significantly increase their chances of successful construction finance. Careful preparation, realistic planning and professional advice are your best allies.

Set realistic goals, use government funding and compare various offers to find the best financing for your dream house.

Crucial point of creditworthiness - With these tips you can increase your creditworthiness

The creditworthiness, also called creditworthiness, is a crucial factor in applying for a building finance. For self -employed people, improving creditworthiness can be a special challenge, but it is not impossible.

Here are some practical tips to improve your creditworthiness and increase your chances of a successful loan application:

1. Careful financial accounting

Guide a complete and careful bookkeeping. Always keep your income and expenses up to date and understandable. A clean bookkeeping impresses the bank and shows its professionalism.

How you do it:

• Use accounting software to document your finances clearly and regularly.

• Keep all documents and invoices and systematically arrange them.

2. Tax compliance

Make sure you pay all taxes on time and completely . This shows your bank that you deal reliably and responsibly with your financial obligations.

How you do it:

• Create a tax calendar so as not to miss any deadlines.

• Add a tax advisor to optimize your tax payments and keep deadlines.

3. Reduction of existing debts

Reduce existing loans and debts before taking a new loan. A low debt ratio significantly improves your credit rating.

How you do it:

• Prioritize the repayment of your debts and plan regular payments.

• Avoid new debts and consumer loans that could put a strain on your financial situation.

4. Positive Schufa entries

Try to build a positive Schufa history. Regular and punctual payments play a central role here.

How you do it:

• Make sure to pay bills on time.

• Use the opportunity to regularly get a free Schufa self-disclosure and correct any errors immediately.

5. Readable stable income

Document your income clearly and transparently. Show the bank that your income is stable and sustainable despite independence.

How you do it:

• Prepare detailed business evaluations (BWA) and sales forecasts.

• Show the previous year's figures and current business figures to prove continuity in your income.

6. Operating utilization and order situation

Update your operating forecasts regularly and show a healthy order situation. This has a positive effect on the assessment of your income and thus your creditworthiness.

How you do it:

• Hold a list of current and future orders.

• Make a running pipeline of projects and customers.

7. Diversification of income

A broadly spread income base has a stabilizing effect. If your income comes from several sources, this reduces the risk of infringements.

How you do it:

• Display your services or products to create different sources of income

• Develop a strategy to get into different market segments.

8. High equity share

A high proportion of equity provides the bank security and shows its financial strength. This can make lending.

How you do it:

• Spare your equity in a targeted manner before applying for a building finance.

• Use any existing assets as additional security.

9. Professional appearance and advice

A professional appearance and well -founded advice can also positively influence your creditworthiness. Banks appreciate cooperation with well -prepared and professionally operating customers.

How you do it:

• Prepare all documents carefully and present them in a structured manner.

• Use the expertise of a financial advisor who can help you prepare for the loan application.

10. Regular review and adaptation

Check your financial situation regularly and adapt your strategies to improve your creditworthiness and keep it up to date.

How you do it:

• Make financial analyzes regularly and adjust your procedure if necessary.

• Keep an overview of your various liabilities and income.

With good preparation for successful financing

Improving your creditworthiness requires time, commitment and a clear strategy. Through careful financial management, transparent income and professional advice, you can sustainably strengthen your credit rating. Set the tips mentioned to maximize your chances of successful construction finance.

By dealing with these aspects and acting accordingly, they not only appear more confident and convincing when applying for a building finance - or financing in general -, but also creates a solid basis for their financial future.

Financing as a self -employed person in the creative industries does not have to be an insurmountable hurdle. With strategic planning, professional advice and the right subsidies, maximize the chances of financing success. 

We wish you good luck from the heart!

Joachim Rodriguez y Romero

Owner and managing director of Kunstplaza. Publicist, editor and passionate blogger in the field of art, design and creativity since 2011. Successful conclusion in web design as part of a university degree (2008). Further development of creativity techniques through courses in free drawing, expression painting and theatre/acting. Profound knowledge of the art market through many years of journalistic research and numerous collaborations with actors/institutions from art and culture.

www.kunstplaza.de/