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In 2022, there are very real ways to get money to develop your own business. Each of them has its own nuances, pros and cons, which we will discuss in more detail. And our experts gave advice to novice businessmen on the issue of finding start-up capital.
Conditions for obtaining money for opening and developing a business
| Where to get | From the state, from banks, from partners, from private investors, with the help of crowdfunding |
| Do I need to return | No, but you need to confirm their intended use |
| How much can you get from the state | Up to 20 million rubles |
| Forms of assistance from the state | Financial, property, information, advisory, educational |
| Availability of a business plan | A business plan is needed in almost all cases, so it’s worth starting with it. |
| Which format is better to choose: partnership or attracting an investor | The main difference between these formats is that the partner has equal rights with the entrepreneur, can influence business processes and conduct business. The investor invests money and waits for profit without interfering in the processes. This should be taken into account when choosing. |
| What to do if the business went bust and the investor demands a refund | In any case, the investor will have to pay off. First of all, you need to give away the money received from the sale of the business, equipment, etc. If this amount is not enough, you can sell the property or enter into an agreement to pay the debt |
Where can I get money to open and develop a business
The required amount can be taken from the state. If the subsidy is approved and the entrepreneur complies with all conditions, the money will not have to be returned. If this method is not suitable for some reason, you can apply to a bank for a loan, find a partner or a private investor, and also get money to open and develop a business using crowdfunding.
Government support
The state supports only those businesses that operate in certain industries. These are the areas of social orientation, innovation, agro-industry and tourism1. In addition, start-up entrepreneurs who plan to organize a small or medium-sized business can receive support.
There is also regional support. It includes subsidies for the development of priority sectors, competitions for grants for women doing business and young entrepreneurs.
The main advantage of state support is that the subsidy does not have to be returned. The benefit of the state in this case is not the extraction of profit, but the development of a lagging sector at the expense of new companies.
At the same time, the entrepreneur who received the subsidy still has certain obligations. Money for business development can only be used for its intended purpose, in addition, you need to report on expenses. Otherwise, the entrepreneur will not only lose his reputation, he may face administrative, and in some cases, criminal liability.
Several government business support programs are currently running2:
| The name of the program | Who can participate | What assistance is provided |
| “Start” | Entrepreneurs who operate in the field of IT technologies | 2,5 million rubles from the state. At the same time, the entrepreneur must find an investor who will additionally invest the same amount in the business. |
| “Smart ass” | Entrepreneurs under 30. Advantage for those who work in the field of innovative technologies | 500 thousand rubles from the state |
| “Development” | Entrepreneurs who plan to expand the company with the organization of additional jobs | Up to 15 million rubles from the state |
| “Cooperative” | Small and medium-sized enterprises that are ready for modernization and infusion into large-scale industrial production | Up to 20 million rubles from the state |
| “Internationalization” | Enterprises and companies that plan to develop projects in cooperation with foreign companies | Up to 15 million rubles from the state |
In addition to all- programs, there are regional ones. Their participants are given a subsidy for development in a certain field of activity. Each region will have its own conditions, rules and areas of support. The subsidy on them will not have to be returned in the future. In addition, state support can take a different format.
- Financial – grants, subsidies, benefits.
- Property – granting business the rights to use state property on preferential terms.
- Information – development of federal and regional information systems for entrepreneurs.
- Consulting – consultations of specialists in the format of training courses on the creation and further conduct of a business.
- Educational – professional training and retraining of specialists.
An entrepreneur whose business is a micro, small or medium enterprise, whose income does not exceed 2 billion rubles a year, and whose staff does not exceed 250 employees, will be able to receive regional support.
In addition, there are other conditions that must be met if you expect to receive assistance.
- At least 51% of the authorized capital of the enterprise must be owned by individuals or small businesses.
- The remaining part (not more than 49%) of the authorized capital may belong to enterprises that are not part of SMEs.
- A maximum of 25% of the authorized capital may be held by the state, regional authorities or non-profit organizations.
- The organization must be present on the market for no more than 2 years.
- The company must be registered with the Federal Tax Service.
- The company should not have debts on taxes, loans and social contributions.
- The organization must be included in the Unified Register of Small and Medium Business Entities. If it is not in the register, assistance from the state cannot be received, even if all other conditions are met.
The main part of government support measures is provided to businesses, regardless of the field of activity. However, when it comes to financial support for small and medium-sized businesses, most often funding goes to the development and support of priority sectors of the economy. Now these include healthcare, agriculture, education, social services, domestic tourism, innovative technologies, wholesale and retail trade, and culture.
In addition to the above benefits, regional authorities may provide other subsidies.3.
- For equipment leasing. The payment of a part of the down payment at the conclusion of an equipment leasing agreement is financed. Compensation reaches 70% of the required amount. To receive, you need to take part in the competitive selection.
- To pay interest on loans. If an entrepreneur took out a loan for business development and support, the state can help him pay interest.
- To participate in exhibitions. The amount of compensation is not more than 50% of the required amount. When holding an exhibition on the territory of the Federation – up to 350 thousand rubles, on the territory of a foreign state – up to 700 thousand rubles.
- For an advertising campaign. The amount of the subsidy is up to 300 thousand rubles. It is paid not in cash, but in goods or services that are needed to run the campaign.
- For certification of products, transportation of goods abroad, obtaining certificates and patents – up to 3 million rubles.
Full information about any type of subsidy can be obtained from the regional office of the Federal Corporation for SMEs. Their list is available on the website mybusiness.rf or the website of the Corporation itself.
You can also get advice on all measures of state support for business by calling the hotline. The list of federal and regional numbers is on the site mybusiness.rf. In addition, an online consultation is possible from the My Business centers on the SME Digital Platform, the official resource of the Ministry of Economic Development of the Federation.
However, there are situations when subsidies may be denied.
- A field of activity has been chosen that is not supported by the state. These are the production of tobacco products, alcohol, insurance and banking.
- The grant application is resubmitted.
- Poor business plan. Income and expenses are not considered in detail enough, the necessary calculations are missing, the payback period is too long, social and economic significance is not described.
- The amount of funding required is overstated.
- Directions for spending funds are not described. This is one of the main conditions. It should be clear from the documents what the money is planned to be spent on. If this is not the case, government agencies will not be able to control the targeted spending of the allocated budget.
If you do not know what you can apply for and what types of subsidies are right for your business, it is more logical to start with a consultation with the Federal SME Corporation.
| Benefits of government support for business | Cons of government support for business |
| The money will not have to be returned to the state | Financial support is expected only for certain economic areas |
| High amounts of cash funding | Money can only be used in accordance with the presented calculations, you need to report on the money spent |
| Many types of support, including consultations, assistance in paying interest to the bank and others | Misappropriation of subsidies is subject to administrative or criminal liability. |
Banks
If it was not possible to get help from the state, you can apply to the bank for a loan. This solution is more suitable for stable companies that have been on the market for several years. First of all, the bank must be sure that the money will be returned back. Therefore, it will be difficult for a start-up business to get the right amount.
However, lending to a business in a bank has its advantages. These are, as a rule, low interest rates, long term loans, ease of registration. In addition, most banks have special programs in which they cooperate with entrepreneurs.
Despite the loyal conditions, before applying for a business loan, evaluate the possible risks. See if you can get it back. In what case it may become impossible and what is the probability of such a case occurring.
A novice entrepreneur should use this method of financing with caution. In order to receive money for opening and developing a business from scratch, you need to meet the requirements of the selected bank and fulfill all the conditions.
As a rule, this is a mandatory execution of an insurance policy, the provision of a collateral or guarantor, as well as the provision of a business plan. At the same time, it is desirable to draw up two versions of the document: full and brief with the most important aspects for faster study by bank employees. It is important to check your credit history and close possible delays.
The probability of approval of the application will also depend on what the entrepreneur needs the money for. Most often, this is an increase in working capital, the purchase of equipment or equipment, as well as the purchase of work licenses.
Credit is usually denied to entrepreneurs who cannot cover at least part of the costs of starting a business on their own. Also, those who have outstanding loans and fines, or organizations that have been declared bankrupt or have an unprofitable business plan, are most likely to receive a refusal. Getting money for a business from scratch is difficult. But it is still possible if the bank’s specialists recognize that the business’s goals are promising.
To improve your chances of being approved, you can seek help from organizations that will apply for you to the bank. Such funds operate in 82 constituent entities of the Federation. For example, the Moscow Small Business Lending Assistance Fund, the Small and Medium Business Lending Assistance Fund, St. Petersburg and others. The guarantee is provided on a paid basis, on average, the amount is 0,75% per annum of the amount of the guarantee.
| Benefits of lending to a business at a bank | Cons of lending to a business in a bank |
| Low interest rates | High risks of loan default if the business fails |
| Simplicity of registration | The need for a business plan |
| Long term loan | You must comply with the requirements of the bank and fulfill all conditions |
| Special programs for business in some banks | High probability of failure, especially for a start-up business |
| Easier to get than government subsidies | |
| Assistance from commercial organizations in guarantee to the bank is possible |
Partners
Before you start looking for a business partner, you need to understand that this person will become a co-owner of your business. It is best if a partner is needed to open an enterprise with a small risk of going broke, for example, a store or a catering organization.
The advantage of a business partnership is a multiple increase in start-up capital. In addition, if additional financial injections are needed, each of the partners can take out a loan or issue a guarantee for the second partner.
At the same time, you need to understand that any of the participants can decide to leave the business and demand their share. He also has the right to sell his part of the business to a third party. In this regard, it is necessary to carefully evaluate the reliability of the prospective partner. It is good if he is an expert in the chosen field, but it is important that you can trust him.
Before you formalize the partnership, develop a business plan that suits everyone. Draw up an agreement, where you fix all the questions on the joint conduct of business.
If there is no suitable person in mind, try to find him on one of the special Internet sites. In addition, there you can present your project or an already operating business and receive additional investments.
| Benefits of partnership | Cons of partnership |
| Increase in start-up capital | The risk of a partner exiting the business or selling a share |
| The possibility of obtaining two loans for business | You need to find someone you can completely trust. |
| You do not have to look for a guarantor for the bank, a partner can become one |
Private investors
Although similar to a partnership, this is a slightly different way of funding. Attracting a private investor involves receiving money for business development without the direct participation of the investor in the conduct of business. Most of all, this method is suitable for those who plan to offer a unique product to the market or discover a new technology.
The advantage of the method can be called the fact that the money for the implementation of the idea does not need to be saved. Also, you do not have to take risks when applying for a bank loan. The project can be implemented with the money of an investor who will not interfere in the processes, but only wait for the return of dividends.
There are also risks. For example, in addition to the debt, the investor needs to give a part of the profit, which is agreed in advance in the contract. In addition, if at some point the business has to be liquidated, the investor will receive the money first. It may even happen that the entrepreneur owes a certain amount to third parties.
You can also contact already established businessmen. Sometimes they invest in projects that seem interesting to them. But it is important to present not only the idea, but also the corresponding calculations that will show the profitability of the business.
There are also investment funds. These are organizations whose activity is to support business and make a profit through investments. They carefully approach the selection of candidates in whose business money will be invested. Before applying to such an organization, you need to develop a detailed business plan. You can search for investors on specialized sites.
| Advantages of private investors | Disadvantages of private investors |
| You can get money for development without involving third-party people in doing business | You need to provide a detailed business plan with calculations and defend your idea |
| No need to save money or go to the bank | Part of the profit will have to be given to the investor |
| High chance of getting money if there is a money back guarantee | If the business fails, first of all, you need to pay off the investor |
Kraudfanding
Most often, this method raises money for charity. You can also get the required amount for a business, but the process will take longer.
The main advantage of crowdfunding is that several investors can be attracted to the project at once. For a novice entrepreneur, this means the opportunity to start a business with almost no own funds. In addition, you can advertise your services on the market and assess the future demand for them.
There are also risks. It is worth approaching this method of raising capital with caution, since if the business idea fails, the reputation will be lost and it will be very difficult to start a business in the future.
In order to receive money through crowdfunding, you need to register on a special platform on the Internet, tell about your project and attach a video presentation.
| Pros of crowdfunding | Cons of crowdfunding |
| Investors will allocate money for development, but they will not participate in doing business | Investors make a decision based on a detailed business plan with calculations |
| You do not have to wait until the required amount is accumulated or take a loan from the bank | A certain percentage of profits will have to be given to investors |
| Due to the fact that several investors can participate at once, the amount will be larger | If the new business does not go well, you will still need to pay off investors |
| You can start a new business with almost no equity | It may take a long time to collect the required amount |
expert Tips
Experts gave recommendations on how an entrepreneur can find the right amount for business development and make it as profitable as possible.
- You should not apply for a loan if the business still exists only on paper. It may turn out that the idea does not work out, and the entrepreneur remains indebted to a large amount. It is better to try to find free help for this.
- The best option at the initial stage is to seek help from the state. If this is not possible or the subsidy was refused, then it is worth trying to get a loan from special business development funds.
- You can get a free consultation at the My Business center, which is available in every region.
- In 2022, IT companies received additional support measures. If you are going to develop in this area, you can find out about all the benefits on the website of the Federal Tax Service in the “Support Measures” section.
- There is gratuitous assistance from the state in the form of subsidies, grants and other projects. With the intended use of funds and proper documentation, the money will not have to be returned.
In any case, before using this or that method, it is worth assessing the possible risks. And decide in advance what to do if the business has to be closed.
Popular questions and answers
We asked experts, a business consultant to answer the most frequent questions of readers Maria Tatarintseva, head of the GK KPSS Abramova Alexandra and a lawyer, public figure, chairman of the board of the Moscow Bar Association “Andreev, Bodrov, Guzenko and Partners”, chairman of the international center for the development of youth initiatives “Generation of Law” Andrei Andreev.
What method of obtaining money for opening and developing a business should an individual entrepreneur (IP) choose?
You can apply for support from the state and receive targeted funds under various federal or regional programs – subsidies, grants. If “free” money is not available, you should apply for preferential loans and credits, or preferential leasing from business development funds. Borrowed funds are available here at 1-5% per annum, which is much lower than market rates in banks.
Alexander Abramov said that money for business can be obtained both at the federal and local levels. For example, 60 rubles are given out to those who want to “work for themselves” as part of the “Help for New Entrepreneurs” program. An individual entrepreneur who wishes to receive this money must contact the local branch of the employment service. The funds issued are non-refundable, but it will be necessary to confirm the expenditure of the subsidy in writing.
Another subsidy for business can be received by individual entrepreneurs who have been open and have been operating for at least 12 months, while it is necessary to become a co-investor in their own project and invest at least 20-30% of the total cost in its implementation. An individual entrepreneur should not have any tax, credit, pension and other debts. To receive a subsidy, individual entrepreneurs should contact the Small Business Promotion Fund or the relevant ministerial structures for economic development and industrial policy.
It is also possible to conclude a social contract, which is an agreement between the social security authority and the citizen. As part of the agreements, the institution develops an individual “road map” of actions for the person who applied for help, and he undertakes to perform the actions specified in the agreement. For example, open a business, find a job, retrain. A social contract is concluded on the basis of the state program of the Federation “Social Support for Citizens”.
Andrey Andreev believes that there are several ways to raise funds for business development, and each of them has its own strengths and weaknesses. First of all, you need to understand whether it will be possible to use your own funds. Given that individual entrepreneurs, as an organizational form, are used by small companies related to small businesses, it is quite realistic to talk about this. An unconditional plus is independence and lack of obligations. In case of failure, the entrepreneur loses only his own funds. On the other hand, it may take a long time to accumulate the required amount, and the relevance of the product/service will disappear.
What are the support measures for starting and developing a business?
Alexander Abramov said that tax deductions for entrepreneurs are being reduced, in particular, payment terms are being postponed, a moratorium on bankruptcy and zero tax rates are being introduced, personal income tax on expenses is being reduced, and other measures are being taken.
For certain industries, for example, IT companies, a number of supportive measures are now provided. For example, the suspension of tax audits until 03.03.2025/2022/2024 and zero income tax for 3-2022. IT companies that have been accredited by the Ministry of Communications will receive additional state support measures: preferential loans at XNUMX%, tax breaks on advertising revenue, deferment from the army for employees and other bonuses. More detailed information about this can be found on the website of the Federal Tax Service of Our Country in the section “Support measures – XNUMX”4.
According to Andrey Andreev, since February 2022, the state digital platform for SMEs has been developing, a single space where business support measures are collected, the ability to search for customers and suppliers, business training is available, a function for checking counterparties and other opportunities is being developed.
On January 18, a bill was passed in the first reading, allowing the largest state-owned or partially state-owned companies to develop their own contractors from the small and medium-sized business sectors. For this, not only financial support measures will be used, but also legal and methodological forms. So small firms will gain experience of cooperation with the largest customers.
Is there gratuitous assistance for opening and developing a business from the state?
• grants from business support funds. For example, in the Novgorod region there is a Creative Economy Development Fund;
• subsidy for starting a business from the Employment Center;
• subsidies in the regions under programs to support youth or women’s entrepreneurship;
• subsidies for certain areas of activity, such as agriculture;
• social contract from social security to open a business for those with low incomes.
Andrey Andreev noted that there are various state subsidies and grants for starting and developing a business on an irrevocable basis. For example, in Moscow there are now programs for the development of fast food chains from 1 to 5 million rubles, for the creation of import-substituting industries – up to 100 million rubles, subsidies for compensation of up to 95% of the costs of training employees of companies and individual entrepreneurs.
Sources of
- 209-FZ http://www.consultant.ru/document/cons_doc_LAW_52144/
- 209-FZ article 14 dated April 24.04.2007, 01.01.2022, as amended on January 52144, XNUMX http://www.consultant.ru/document/cons_doc_LAW_XNUMX/
- Budget Code of the Federation” of July 31.07.1998, 145 N 28.05.2022-FZ (as amended on May 19702, XNUMX) http://www.consultant.ru/document/cons_doc_LAW_XNUMX/
- https://www.nalog.gov.ru/rn77/anticrisis2022/
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