State Subsidies for Business Coaching

Many self-employed people or companies are so busy with their daily operations, that strategic planning often comes up short. In such situations many businesses rely on external consultants. These consultants can be partially financed with state subsidies. This article will explore the general prerequisites and subsidy amounts to help you make use of this extra state-funded help for your consultancy needs. As of January 2016 the funding institutions have been reduced to only one. Now the Bundesamt für Wirtschaft und Ausfuhrkontrolle (Federal Office for Economy and Export Control (BAFA) grants state-funding and subsidies upon application and only for consultancy by accredited consultants. This measure is financed by the European Social Fund (ESF) of the European Union funding.

State Subsidies for Business CoachingBild von Gerd Altmann auf Pixabay

Object of Funding

General consultations and special advisory services on economic, financial, staff and organizational questions for business management. In addition, consultations for businesses which are general consultancy. All economic, financial, personnel and organizational questions of business management.

Special Advisory Services

In order to counteract structural inequalities further consultancy services can be subsidized in addition to the general consultancy topics. This includes consultations on businesses that are

  • managed by women
    or
  • immigrants
    or
  • entrepreneurs with recognized disability and/or
  • enhancing the work organization for disabled employees
  • contributing to sustainability and environmental protection.

 

Eligible Persons

Existing small and medium-sized companies in the industrial sector and members of professional service providers, as well as freelancers, who have a turnover below € 50 million or a balance sheet total below € 43 million and also less than 250 employees. The new “Advancement of entrepreneurial know-how” is aimed at

  • young entrepreneurs, who have not been in the market longer than two year (young businesses)
  • businesses from the third year after incorporation (existing businesses)

The companies must have their place of business in Germany and have to meet the EU definition of small and middle sized businesses

Type and Amount of Funding

Subsidies have to be used for the fees of certified business consultants. The maximum subsidy in the old federal states (= former West Germany or FRG) is 50% of the consultant's fees and a maximum of € 1,500 or € 2,000 for young businesses. In the new federal states (= former East Germany or GDR), 80% of the fees are subsidized with a maximum of € 2,400 or € 3,200 for young businesses. Some exceptions for the Leipzig, Berlin and Luneburg area apply. Every company has a consulting quota for general advice and specific advice over a total of € 3,000 or €4,000 for young businesses each under the terms of the guidelines.

N.B. VAT will never be subsidized as this is not considered an expense – but more as an advance to your VAT bill. (More on this VAT topic, see also the Value Added Tax section on my website).

General and specific discussions will also be subsidized together with grants of up to € 6,000. This restriction does not apply to consultations on environmental and labor safety and health, for women entrepreneurs, or foreigners on entrepreneurial management and to reconcile work and family life. The funding is available under the restraints of the budget.

Deadline / Application

Grant applications can only be submitted to the authority via your business consultant. Our cooperation partner Wandel Consultants has great knowledge of this law and specializes in business consultancy and the preparation of business plans. Please note that you only have time to apply within 6 months after end of consultation and payment of the consultant's fees.

6. Process

We will assign

  1. the business consultant on your behalf,
  2. the business consultant will invoice you accordingly,
  3. You pay the business consultant while they draft the business plan,
  4. You send the business consultant proof of payment because the authority wants proof of payment from you as they will refund you and not our partner,
  5. You can use the business plan for immigration purposes or for other state subsidized loans or grants.

7. How high is the subsidy amount?

The amount of the subsidy depends on the maximum granted for eligible consultancy costs (assessment basis) as well as the location of the business.

Subsidy Rates:
80 % new federal states (without Berlin and without the Region Leipzig),
60 % Region Luneburg,
otherwise 50 %, 
90 % Companies in difficulties regardless of age and location
Business Type Assessment Basis Subsidy Rate Maximum Subsidies
Young Businesses
not more than 2 years on the market
4000 Euro 80 % 3200 Euro
60 % 2400 Euro
50 % 2000 Euro
Existing Businesses
from third year after incorporation
3000 Euro 80 % 2400 Euro
60 % 1800 Euro
50 % 1500 Euro