What steps should a migrant take if they want to start their own business?

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The typical financing process starts with your primary bank—the one where you have your account—where you can discuss the next steps. Another option is to go directly to the financing portal of the Deutschen Bürgschaftsbanken (German Guarantee Banks) and submit a request there to outline your financing needs. We developed the BBBwelcome program for immigrants to give them the opportunity to secure bank financing for their business startups.

As a guarantee bank, we then connect you with a primary bank. In summary: If you already have a primary bank, going through that bank is the best route; if you don’t have one yet, you can find a bank on the financing portal with our help.

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Are the embassies in Berlin aware of this project? Would it be important for diplomats to know about it?

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Yes, it certainly can’t hurt. Of course, not everyone comes to Germany with the intention of starting their own business here. But if someone plans to start a business or join an existing one, BürgschaftsBank Berlin can help them take that step.

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Have you already informed the trade attachés and trade counsellors at the embassies about BBBWelcome?

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That depends on who you speak with and whether that person has experience handling such requests. We don’t want to impose ourselves, but simply to point out that this option is available.

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How successful is BBBwelcome?

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We're only at the beginning, so there are still relatively few cases for the BBBwelcome program. In fact, we would have expected more inquiries in the beginning.

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What is the reason for that?

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It’s possible that the applications aren’t even reaching the applicants’ primary banks, which means they can’t be forwarded to us at the BBB. The program simply needs to become better known. But it’s also possible that financing works differently within this target group—namely, through family and relatives.

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Which nationalities are the most common?

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Most of them come from the typical regions of origin. As a rule, they are applicants with a migration background. The program is aimed at non-EU citizens, since EU citizens tend to secure financing in their home countries. However, our statistics are not yet very conclusive.

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What is the situation like in other federal states?

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Nationwide, the guarantee program is unique, and BBBwelcome is only available in Berlin.

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Who was the initiator? The bank or the Senate?

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We at BBB initiated this together with the Berlin Senate. We examined what meaningful offerings we could still provide—especially for the Berlin market. This led to the two initiatives, BBBwelcome and BBBsocial: While BBBwelcome offers refugees the opportunity to obtain financing from the bank to start their own businesses, BBBsocial is designed for social enterprises, which are also very common in Berlin. Berlin is home to 20 percent of all social enterprises in Germany.

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Will other federal states imitate it one day?

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I don’t think so, because it’s too niche of a business model. We typically receive requests for financing in the range of 100,000 to 200,000 euros. Those aren’t huge sums. As a result, very few banks are willing to set up a separate business unit for such small volumes.

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Which industries are represented?

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Generally speaking, it’s the traditional Berlin service sector, followed by retail and the restaurant industry. That’s exactly what we expected. It doesn’t really differ much from Berlin’s overall economic structure. By the way, skilled trades are also included.

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Do the companies in this target group already have employees? Do they create jobs?

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Most of them aren’t one-man or one-woman shops. Rather, they are small businesses, naturally with employees. This also correlates with the loan amounts.

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Do we need to do more to educate people? Should we just say, “Come see us at the bank like you normally would”?

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Especially when you’re just starting a business and haven’t yet reached the final stage you’d like to achieve as an entrepreneur, it’s naturally wise to get in touch with banks early on. In such situations, we naturally also require a certain amount of equity capital, which should be available.

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What should the average down payment be?

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That depends on the amount. For 200,000 euros, we estimate about ten percent, or roughly 20,000 euros—that’s a perfectly reasonable benchmark. For larger sums, such as one million euros, however, this rule of thumb doesn’t apply so easily; in practice, ten percent is usually not realistic in those cases.

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What impact can this support have on an individual?

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If someone in such a situation wants to gain a degree of independence from their own family, this can be a suitable approach. This is especially true in cultural contexts where it is often more difficult for women to take the step toward self-reliance. Our program can help participants gain more independence and forge their own path—including the self-confidence to say, “I can do this on my own.”

Currently, however, this is still more of a theoretical consideration, as no women entrepreneurs have participated in our program so far. In principle, though, it offers a good opportunity to develop greater self-reliance.

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Have you had any dropouts?

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Most cases are successful. Unfortunately, we have also had some dropouts. However, these have nothing to do with deportation, expulsion, or the non-renewal of a residence permit, but rather with economic considerations in the service sector.

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Why is the Senate participating in the project?

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One of Berlin’s strengths is its diversity. We’re seeing a particularly strong willingness among refugees to become self-employed. We want to encourage that. We shouldn’t let formalities stand in the way of someone starting a business. I believe the Senate has recognized this as a priority. I can only support that. We have many entrepreneurs in this sector who are certainly willing to take risks. Promoting this and giving them the opportunity to be economically successful is definitely a task that a city like this should take on. And that is exactly what the Senate is doing with BBBwelcome.

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Has word of this already spread to the Immigration Office?

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I can’t say for sure. We’re certainly leveraging our networks. But given the general flood of information, it’s possible that not everyone has heard about it yet. We don’t want so-called “desperate startups,” based on the idea of, “I don’t know what else to do, so I’ll just give this a try.” You really should have some experience in the industry.

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What if someone only applies for 10,000 euros?

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We find it difficult to handle commitments of 5,000 or 10,000 euros. Given our relatively complex approval processes, we are not the right partner for such transactions.

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Micro-mezzanine — what is it?

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Micro-mezzanine is a specialized form of financing designed specifically for small businesses and startups. It is a type of mezzanine capital, which is a hybrid between equity and debt. The advantage is that this capital functions economically like equity without requiring traditional collateral. This improves the company’s creditworthiness, which in turn can facilitate access to further financing, such as from banks. Especially for founders or smaller businesses that do not yet have sufficient collateral, micro-mezzanine is therefore an important tool for making investments and placing their projects on a solid financial footing.

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How long can it take from application to payout?

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As soon as we have all the documents, it's very quick. Then our processing time is even less than two weeks. Our committees with the Senate discuss the motions every 14 days. If a business plan or other documents are missing, the process is delayed and can take several weeks.

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Would it be helpful for the applicant to be represented by a lawyer or advisor?

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It is not mandatory for the applicant to be represented by a lawyer. However, support from an experienced business consultant can be very helpful. Such consultants often play an important mediating role within the community.

For example, many founders with a Turkish background are supported by Mr. Emre Kiraz, who provides assistance particularly in the preparation of business plans. This area in particular poses a challenge for many and is often uncharted territory depending on prior experience. For us, however, it is crucial to receive robust and transparent business plans. These should clearly outline the planned margins and the assessment of the sales market. We must carefully review these aspects.

We also collaborate with other management consultants. Their support is important because they help to realistically manage and channel the applicants’ expectations. While we can assess for ourselves which requirements must be met, However, the consultants are particularly skilled at assessing, based on our preliminary review, how high the chances of success for an application are. In practice, it has been shown that the Senate very rarely rejects cases that we have prepared accordingly.

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How much funding was initially planned or expected when the project was launched?

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Since this is the first time, we didn't have any clear expectations. The BBBWelcome program and the BBBSocial program together have a budget of 50 million euros. This was deliberately combined in agreement with the Senate to avoid blocking resources on one side that might be needed on the other. Within this budget, we had planned to allocate half to BBBsocial, or 25 million euros. However, we still don’t have a clear sense of how wide the gap between the two programs is.

I would call BBBwelcome a problem-solver; a good option when someone has a specific problem, to advise them: “Go to the guarantee bank; they have the right program for that.” Large banks are looking for big deals with little risk. Here, they do have little risk, but no big deals. Some banks try to avoid such transactions altogether, even if we provide the guarantee for them. It’s simply too fragmented and not a viable business model for the banks. They don’t see any benefit.

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Who would be the specific contact person at the BBB?

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Mr. Marwin Meissner, our Head of Corporate Clients, can coordinate this, but all other corporate client advisors are also available to work on the program: https://be.ermoeglicher.de/de/ueber-uns/kontakt/ansprechpartner/

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What happens if the credit period and the right of residence of the foreign founders conflict?

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That’s a tricky situation. Our program is only helpful if the credit period and residence status match. Otherwise, it's really difficult. Especially if you have investment financing, which usually runs for eight to ten years. If a residence status expires after two years, it doesn't add up.

So it's best to simply apply for financing via the financing portal or simply make an appointment and come to us, then we'll see what we can do: https://be.ermoeglicher.de/de/ueber-uns/kontakt/kontaktformular/

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The interview with BBB managing director Steffen Hartung was conducted by Ewald König.

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